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.

RIMM unscathed?

Does the Nokia acquisition offer for Navteq have any effect on RIMM? I wondered this, and found that the BlackBerry uses technology from a Navteq competitor, TeleNav.

TeleNav GPS Navigator for BlackBerry

TeleNav has already been made a buyout offer, but that affects Garmin more than Research in Motion.

This is just a small bit of info, but the more I know about RIMM's innards, the safer I feel about buying more shares before Q3 earnings come out in two days. The stock is down 2.4% today and now trades at its 10-day moving averages, which hasn't happened in some time. At $96.23, it's above its low for the day (95.02).

[Epilogue: I just added a few more shares at 96.25. I could say this is technically sound since it's trading near its 10-day SMA (95.89), but I really would rather prefer a discount. The 50-day SMA is 81.44. I don't think RIMM will see 81 barring a global market meltdown.)

The Good, The Bad and The Ugly

Unless you work the graveyard shift or live in the Pacific like I do, it may be a bit difficult to relate to what I'm saying. Waking up to see such strange things always gets me.

• In a middling market, AAPL continues to push higher. And higher. Trading at 157.50 right now. Me happy.

• BIDU is up 11% to 317. What the heck is going on? (I'll look at the news later.)

• GRMN is down another 10 bucks or so. When I got a small position a couple of weeks ago, I was content to finally have one more of my A grade stocks in house. Little did I know that the Co was one event away from potential disaster. I thought yesterday's 10% fall was tough, but another 7% today is either pure panic by shareholders or the beginning of a new, not-so-fluffy era. Simple question: Why didn't Garmin just buy Navteq in the first place?

• It's not that bad. LULU exploded today to a mid-day high above 47, now trading above 46.

• RIMM, two days away from Q3 earnings, is falling again. Today, down 3% to 95.75. This wouldn't be the first time a stock sells off in advance of earnings, but it's not what I expected of this week.

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.