Garmin not as gnome-ish today

Is Garmin still a buy here? The stock popped 4.2% to 100 today, no surprise since it was below its 10- and 50-day simple moving averages yesterday. I thought it was a buy yesterday, but cautiously so.

So, is GRMN a buy at 100? Yes. Here, it's almost touching its 50-day SMA, actually slightly below. The X Factor, of course, is how the Co solves its map-access issue in the long term. Buy Navteq? Build its own navigation (software)? Whatever the answer is, volume today was 9.5 million shares, the strongest up day since Sept. 27. Then again, the past three down sessions all have greater volume than today. The Co is superb and the bump up today was no surprise. Without any news to the upside, however, patience is required for longs.

Pupule says: Buy cautiously, be patient.

Garmin a gnome or a giant?

Almost too good to be true if you've been waiting for a bargain price in Garmin (GRMN). At $96.54, or the afterhours price of $96.40, the stock is trading below its 10-day SMA and EMA and its 50-day moving averages. That kind of dip is extremely rare to find in today's frothy market, and not without reason. The major run-up left a lot of traders with hefty paper profits, and when Garmin got the stiff arm (Nokia's planned buyout of Navteq), it appeared at first that Garmin's access to online mapping was shot.

Not so, though. Nokia/Navteq is still contracted to sell maps to Garmin, though there's no way to know what happens with the pricing. The deal is long term, so it's not like Garmin's great GPS products will go without maps all of a sudden. The Co has alternatives, though, none were as good as owning a Navteq. Still, I see the Co rebounding from this major drop over the past three sessions. The all-time high of 122 on Friday is no more.

This 21% fall is mighty. It is also losing steam. Volume on Monday, the gap-down session, was 22 million shares. It was 19 mil on Tuesday and 9 mil today. Is the selloff done? Perhaps. The Co seems to be in no rush to soothe shareholders. I wouldn't be surprised if there was no word from Garmin until earnings come out at the end of this month.

So, is GRMN a buy? Depends on what you think of management and the Co's execution.

Pupule says: Buy small if at all. The floor is near, and shrinking volume says a lot. When this stock turns back up, it'll be swift.

By the chart: A- shopping list

Now that Big Ben has essentially told the markets, "You made your bed, go sleep in it," volatility is here to stay.

The good is that strong companies will still maneuver through the muck and reach new territory in the market. Weak companies? Investors will have less of a pain threshold for those little puppies who need boatloads of free cash to stay alive. Rough world.

Looking at the charts, here's how I view my A- picks on the shopping list. A bargain is a bargain is a bargain. No sense overpaying for great stocks when they always come back to a decent price. I don't think we'll see AAPL at $128 again soon, but I think it's a buy here. This list may help you (or not), but it will serve as a reminder to myself to avoid chasing a runner! It happened last week when I added more Nintendo at $62. Whoops.

AAPL 135
Middle of simple and exponential moving averages. Pupule says: Strong buy.

AMZN 79
At top of moving averages. Low volume today. Big fight between longs and shorts. Pupule says: Wait.

BIDU 199
Near top of moving averages. Below-average volume lately. Though I wanted to see BIDU come back down to 175, that looks out of the cards. Pupule says: Buy.

CEO 112
At bottom of moving averages. Soft upside volume, but the funamentals and the new deal in southeast China are positive. Pupule says: Strong buy.
[Note to self: If CEO trades at the same P/E as PetroChina (PTR), its PPS would be 124.]

CMG 108
Floating above moving averages. Pupule says: Wait.

CROX 57
Slightly above moving averages. Pupule says: Wait.

FWLT 106
At bottom of moving averages. Earnings next week. Pupule says: Strong buy.
[Note: FWLT traded at 111 in extended hours. Not so strong a buy at that level, but still in range.]

GOOG 516
No longer below moving averages with the nice gains in the past two sessions because of the wireless advertising (cellphone) dimension. Not as cheap as last week. Pupule says: Buy.

GRMN 100
Floating above moving averages. Pupule says: Wait.

NTDOY.PK 58
Just above moving averages, but this stock is so hot that it rarely trades within. I might get more here. Pupule says: Wait.

RIMM 222
At top of moving averages. Tough call here. Pupule says: Wait.

UA 64
Floating above moving averages. Pupule says: Wait.

Pupule Paul is long AAPL, BIDU, CROX, NTDOY.PK and UA.

Close-up: Garmin vs. Nvidia

Garmin ran with the wind after blowing out earnings estimates last week.

Shares went from $83 on the eve of earnings to a current PPS of $99 in less than a week. The Co not only beat estimates, but raised guidance. This Thursday, another hot company will report earnings.

Nvidia, seems poised to ride the tech tail set by companies like Garmin, which raised guidance for Q3. If NVDA can replicate GRMN's performance, there should be upside, right? Well, yes and no.

While Garmin's stock has shot up at an unsustainable pace, its growth rate and whopping return on equity — more than 40% — can justify a forward P/E of 25. In addition, the stock has a short interest of 14% on a float of 102 million shares.

NVDA, with a forward P/E of just 20, has a smaller market cap of $15 billion to Garmin's $21 billion. Profit (15%) and operating (16%) margins were solid after Q1, and return on equity was a healthy 26%. The Co also has $1.3 billion in cash and zero debt.

Short interest for NVDA is low at 6.6%, so a positive earnings report won't be boosted by the kind of squeeze that launched GRMN. Nvidia stock is up 50% since early April.

The stock appears to be buyable at $43 as the market opens, but patience is key. So is some comparison shopping. One of the most telling indicators about NVDA and GRMN in the near and long term is institutional holding. NVDA is 76% held by institutions. GRMN? Only 31%, which is why I'm not sold on a NVDA buy as a trade. The street will show up en masse at Garmin's door sooner or later.

As an earnings play, I like NVDA. But I still prefer GRMN on a dip. If I were already long NVDA, I'd feel pretty comfortable, bad market and all. GPS will be a growth sector even if I don't have it in my car, handheld device or homemade aluminum robot.

I think I'll stay on the sideline and keep watching. Or rather, hit the sack. It's 3:51 a.m. here and time to get those zzz's.

Pupule Paul has no position in GRMN and NVDA.

[Ed's note: When I wrote this early in the morning, I wrote mistakenly that NVDA was in the GPS sector. I'd forgotten that it is a chipmaker. It was Navteq (NVT) that I was thinking of. Yep. GPS is still a foreign land for me.]

A- picks mostly underwater today, but UA still on fire

Less than an hour left in today's session. I woke up a few minutes ago and found a whole lot of blood on my black screen.

Not shocked, not even surprised. This is the market as it lives and breathes today. It's part of the reason why some people went into the real estate business. Especially in Hawaii, land is more than gold. It's certainly a limited commodity. But I digress. Damn this market is schizo!

On my recently updated A- pick list, seven stocks are down and three are up.

The three A- kings that are standing tall today are Garmin, Nintendo and Under Armor. Garmin is robust and hit $100 for the first time. Yes, I'm still in a house of pain because I passed on GRMN earlier in the week at $83 on the eve of earnings. So much for a pullback. GRMN is kicking tail as the rest of the market drowns in red.

Nintendo (NTDOY.PK) is up fractionally in the $57 range. Current bid is $57.35. Tempting at this level since it pulled back from $65 on July 26. This is the first stock I've owned that is subject to an outside market. Completely. As a pink sheet here, it doesn't trade in extended hours. The stock simply, though it doesn't necessarily have to, trades as a mirror to "7974," which is its ticker on the Tokyo Stock Exchange. When extended hours ends in the U.S. — 8 p.m. Eastern — the TSE begins trading. Too bad there's no overlap.

The big gainer of the A- kings is Under Armor (UA), which roared to $68.24 before pulling back. UA is trading at $64.75, up 4.4%. The stock has a short interest of 50% and has been en fuego since blowing out earnings estimates this week.

The downers included Foster Wheeler (FWLT), which has given back more than 5% today and is trading at $111.42. Though FWLT announced a nice deal with Sinopec on Wednesday, the stock sold off more than 6% today. With earnings due out on Wednesday, FWLT looks like a discount buy here.

Crocs (CROX), meanwhile, is down 2.4% to $58.88. The stock has seen dwindling volume in recent days and was due for a pullback after being up in four out of the last five sessions. CROX is trading at $58.97.

Ron Snyder, Crocs CEO, exercised options on more than 234,000 shares on Tuesday. He sold them at $59 to $60.10 each, which means he raked in nearly $14 million. His reward for another outstanding quarter. Those who think CEOs get paid too much will quibble. I suggest that they apply for his job and try to steer this juggernaut as well first.

I'm completely for restraint when it comes to outlandish salaries. I'm also for the kind of incentive-based pay that Snyder gets. You perform, you are rewarded. Happens in professional and college sports, as well, so the socialist line of thinking should apply there, as well. There's a reason why America continues to produce great companies, even in an economic slowdown, while more socialist-flavored, laid-back nations remain stagnant.

When's the last time France produced a great company anyway? But again, I digress.

Apple (AAPL) is down nearly 2% today for no other reason than a general market selloff. With the Nasdaq down 1.5% (40 points), the Apple tree is going to take a few hits from the bear ax. If it turns out that all this volatility is because the big boys on the street are selling their winners to cover the ineptitude of the sub-prime mortgage mess, I'll be very disappointed. Ha.

Hat's off to the earnings elite

Sohu. Rhymes with tofu and dofu.

Stock of the No. 1 portal in China was just as mushy yesterday. Though the Co beat expectations, earnings were down for Q2. The market was lukewarm in response, which got me thinking about the companies that have beaten expectations and raised guidance

No, Sohu didn't raise guidance. That's a conversation that could happen by the end of this year since Sohu is supposedly the exclusive online presence in China for the 2008 Beijing Olympics.

But as for companies that have blown out expectations and raised guidance, this is a short list:

Crocs (CROX)
Garmin (GRMN)
Navteq (NVT)
Under Armor (UA)

Research in Motion (RIMM) beat earnings expectations, but didn't raise guidance. However, they were one of the few companies to announce a split (3-for-1).

On the eve of Q2 earnings:

CROX $50
GRMN $83
NVT $54
RIMM $165
UA $55

Today's PPS
CROX $59
GRMN $96
NVT $63
RIMM $217
UA $63

There was money to be made for buyers before earnings, but there's been significant pop for buyers after earnings, too. How can anyone dispute the pop in a stock that gets the most bullish guidance from its CEO?

That, basically, is the difference between the relative safety of a cash-making Co in the midst of stellar growth versus a small or micro cap that has yet to register any revenue. Two worlds, two different definitions of success.

Pupule Paul is long CROX and UA.

Some cheese with this whine

Welcome to the Bitch & Moan portion of today's posts. Yes, a little venting is good for the overall health. That would be wine. Not so much the cheese. All the great-tasting stuff is bad for you.

I begin my rant with my beloved Nintendo (NTDOY.PK). Today, the stock sank with the rest of the Tokyo market. Well, not to the bottom, but dropping $3 to $58.75 sucks. When I bought more shares at $62, it was with the long term in mind. Still is.

I just wish I'd waited a day or so. The blow wasn't too bad. I rolled with it because late last night, I saw the stock in Tokyo peeling back 3%. Maybe I'll buy more tomorrow.

Garmin (GRMN) beat earnings expectations, as I expected. Did I get shares before the fact? No. And I regret it. That's what I get for not studying this Co much more in recent months. GRMN closed at $83 yesterday. From Reuters writer Purwa Khandelwal:

Investors had been optimistic that Garmin might beat expectations, but it topped even the most bullish outlooks.

"(The company) reported even more upside than we had expected and easily surpassed our read on 'whisper' expectations," Rob Sanderson, an analyst with American Technology Research, said in an e-mail to Reuters.

Second-quarter earnings were 98 cents a share, versus market expectations of 74 cents a share.

Revenue rose 72 percent to $742 million, boosted by a doubling in revenue from its automotive/mobile segment and a 59 percent rise in revenue from the marine business.

Garmin also raised expectations and increased the dividend from $.50 to $.75. There is a strong possibility that the Co will buy Navteq; no comment yet from the Co. The CC was at 11 a.m. Eastern today, and the stock opened at $90 today. It's currently at $93 in after hours. Waah.

First Solar (FSLR) took a major hit yesterday with a sub-par earnings report, at least in terms of slowing growth. The stock ran from $120 mid-day to $98 in after hours. However, FSLR bounced back and closed today at $107.

As MC Hammer said, can't touch this.

Why is Amazon (AMZN) still dropping? The stock sank to $75 today before closing at $77. All because of what? Profit taking? Sure. Barron's negative piece? Probably. I have no AMZN, so I should count my blessings and look for an entry point.

Crocs hit $60 yesterday, closed at $59, and is down to $58 today. Is the short squeeze over? I doubt it. We'll see after August expiry just what happens with a stock that has 32% short interest. Besides, the stock actually dipped early in the day to $56 and change, and then recovered quickly.

This is one of the companies that has raised guidance for Q3. Since the eve of recent earnings release, when CROX traded at $50, the stock is up 16%. That's hefty. I am not going to whine. That would be a sign of greed.

I got in at $40, $50 and $57, and CROX keeps going up. Nope, no complaints here.

Focus Media (FMCN) has returned to its downslide. The stock lost more than a buck and closed at $40.08 today. I know the hearing with Nasdaq is coming, and that these kind of things take time. Is FMCN a steal at this level? Of course. But I ain't messing with a buy. Dendreon (DNDN) has already given me enough headaches with anything to do with higher-ups (SEC) and off-field crap (lawsuits up the okole).

Yingli Green Energy (YGE) continues to tease and taunt me. The stock was up just a bit today after hitting $18-plus earlier in the week. Though I see limitations — the Co has exposure only in Western China to go with off-shore contracts — it is still an undervalued alternative energy play in a fast-growing region of the free economy. I still don't view YGE as a better growth Co than Suntech (STP), but YGE may have a nicer growth spurt ahead.

This is a lot of bitching and moaning, I know. But I'll leave you with one happy ending (for the day). My nephew's pick, Under Armor, keeps climbing. Whether it's the awesome earnings report or 50% short interest, UA is up to $64 now. Guess that makes up for my ineptitude on GRMN and NTDOY.PK.

With the choppy market, I should anticipate more of the same. Then again, earnings reports are almost all out, so we may settle into a lull. Finally.

Pupule Paul is long NTDOY.PK, CROX and FMCN.

Bargain hunting can be dangerous

A bargain hunter's paradise? Perhaps.

While most investors are staying out of the water (and I still wish ABC hadn't cancelled Invasion), I can't help but scroll through my favorite stocks at discounted prices.

• AAPL. What gives? A dumbass rumor sent this down to $131. It's still a steal in after-hours at $132.86. I know there is an issue with the iPhone's security flaw. But this is my favorite Co in so many ways beyond my devotion to this aging PowerBook. Apple will fix the problem as long as Steve Jobs is cracking the whip.

• BIDU. This got knocked down to $199 before closing at $201.98. Stellar earnings and supreme confidence by CEO Robin Li. Oh, and they have the backing of the world's toughest gang, the Chinese government. You say protectionism, I say Big Bubba got their back.

• RIMM. I'm not a fan of the Blackberry. Never touched one. But the fundamentals and growth (hello China) are astounding. RIMM shares peeled back 2.7% to $214. Bargain? Maybe.

• GOOG. Down just 1% to $510. As much as I love the Co, I just don't look to GOOG for my buys. I probably should. These guys won't split the stock, won't give guidance to analysts ... they do things right.

• CEO. Yup, I am still high on CNOOC Ltd. It pulled back a couple of bucks to $118.60 by the close. Still trading at just 11 times earnings. CEO was a steal before this correction.

• GRMN. Losing 1.3% today doesn't make Garmin a big discounted stock at $83.90. But earnings are out tomorrow, and sales are healthy. With GPS showing up in and on almost everything these days, $83 could well be a discounted price. I just wonder if slowing auto sales will have an impact right away.

• UA. Under Armor blew out earnings expectations, raised guidance and zoomed up 17% to $64.75 today. Then came the broad market selloff, along with profit-takers. At $61.41, UA is still 12% up from yesterday's close. But short interest is 50%. FIFTY PERCENT. Very compelling here. I should get some shares for my nephew sometime soon.

Maybe it's too early to wade back in. Maybe buyers will get caught in the tide. The companies that have destroyed bears with an arsenal of great earnings are lovable. More lovable when they raise guidance. Those would include UA and CROX.

Pupule Paul is long AAPL and BIDU.

Like GRMN, amazed by CEO, in luv with AAPL

They're pricey, sexy and so unlike each other.

Garmin traded up 6.4% to $85.07 today. Even with slowing auto sales domestically, GPS is still a must. Garmin has made a lot of money for traders, but entering at this point is something that spooks me. I need to learn more about GRMN since I'm such a tech toy novice.

CNOOC Ltd. traded up 3.4% to $116.75. It moves like a tech stock. How does an oil and gas Co move like a tech stock? Amazing. I wrote about CNOOC over the weekend, and though I've been watching this for months, I just can't pull the trigger. During that time, the stock has ballooned without getting too puffy.

What I mean is, CEO trades at only 11 times earnings in a land that needs more and more energy. Sure, alternative energy is bumping up in China, but the need for CNOOC growth is real. Today's rise ended a four-day skid, but volume was mediocre, so I'll stay on the sideline with binoculars.

What about my favorite Co? That would be Apple. Though I consider Nintendo as a stock that has more upside, AAPL will still kick arse. I feel a little queasy about adding more shares without more info about the security flaw in the iPhone, but ultimately, I trust Steve Jobs as much as any CEO. They get serious work done there at Apple. Underpromise. Overdeliver. Basic tenets of great business.

AAPL pulled back to $139. I hesitated. It closed at $141.43. I'll hold out until after this week's Black Hat hackers conference. If AAPL has a solution for the iPhone problem, I want to shake the tree and collect more Apples.

These three stocks are in different worlds — wait, does the iPhone have a GPS system? — but longs are are happy bagholders, indeed.

Pupule Paul has a tiny position in AAPL.

Pupule promotions, demotions

With a tide of earnings reports in, it's time for some shuffling in my stock pick lists. Movin' on up:

Nintendo NTDOY.PK whacked it out of the park with its gigantic revenues and profits.

If it's one thing about the Japanese market, the fluff and wild speculation are just not, well, fluffy and wild. Think about it. While we have intrigue and bubble thoughts hovering over China — not to mention the way the government's ownership in major stocks — it's not so in Japan. Savings rates among citizens are astronomically high, as always, and bubble-icious stocks are not as prolific as they are in China or the U.S.

That's not why I am so devoted to Nintendo, however. It's about the numbers, which don't lie. That's why I'm backing up my bullish stance (and holding) by moving NTDOY.PK from B+ to A-.

Finally.

Garmin This is a Co that was on my B list when it should've been at B+, which is where I'm moving it today. Not understanding what the Co does is a large reason why I paid so little attention to it. Strictly on the numbers, though, I liked it at the B level. GRMN's earnings report is due out on Wednesday.

Demoted:

Spartan Motors As a Co, not much has changed for SPAR. Landing contracts (or not) is a way of life, an irrefutable fact of life that alters its stock. But the flip side of it is that the fundamentals of Spartan won't make investors a profit unless revenues are realized, and without the latter, the stock has tumbled mightily. As much as I rely on a Co's fundamentals, stocks are about popularity to an unfortunate, but real extent.

Is yesterday's $1 million stock buyback going to turn the tide? With the earnings miss (by 6 cents per original estimate), that'll be tough. The Co is quite the same. Traders who ran it up and knocked it down ... they're the real Jekyll and Hyde here. The real longs will scoop up cheap shares here at $12, particularly with 40% annual growth coming, according to the Co.

Hoku Scientific Demoted from B- to C+. Great prospects, dwindling revenues (per last week's earnings report), huge promises. HOKU is not your average small cap. It's the equivalent of taking a promising young baseball player out of the minors after a short stint and starting him on a major-league team. Hard-working player, diligent on and off the field, but at least a year or two from hitting his stride.

Opposing fans ride him incessantly for his hefty paycheck. Home fans dote on him and believe he will develop into an All-Star in due time. HOKU traded up today, but at $9 is well off its high in the $14 range. This is likely a trader's dream for the coming 18 months.

Volcom An earnings miss has pulverized the stock, which traded today at $38, a 14% haircut. I own a Volcom surfer wallet and like it. However, unless some new products enter the market, VLCM is going to trade sideways for some time. Retail is a rough market, more so with an outdoor-oriented Co that misses in what should have been its best season of the year. I demoted VLCM from B to C+.

Joy Global Earnings aren't due for another month, but a guidance cut from JOYG sent the shares down 14% on Wednesday.

Demoted down to C+ by Pupule.

Dendreon The silence from top brass is deafening. Insider sales, including those by CEO Mitchell Gold, before the stock took a major plunge off a cliff on May 9, still haven't been explained sufficiently by the Co. Worse yet, the lack of transparency has the SEC mired in an "informal inquiry" of DNDN and its clinical trials.

Provenge is Provenge, a potentially life-extending immunotherapy treatment for prostate cancer patients. However, DNDN has shown no signs of life when it comes to navigating the treacherous waters of the FDA, hedge funds and big pharma. Provenge has been shelved for much too long, and no reason the Co has given can excuse the delay for patients.

Demoted from C to D+. Sadly, until management is shaken up or overthrown, Provenge will remain locked up.

Pupule Paul is long NTDOY.PK, HOKU and DNDN.