We recently published a list of Jim Cramer’s Top Picks: 10 Stocks to Buy and Sell. Since Garmin Ltd (NYSE:GRMN) ranks 9th on the list, it deserves a deeper look.
Commenting on the aggressive rate cut by the Federal Reserve, Jim Cramer said in a latest program on CNBC that the “double” rate cut was needed for the economy and it would help the housing market, industrials and companies catering to the “less well-off” households.
“There really are two economies in this country. There is the one that needs lower interest rates because business is slowing and it’s harder to find a job and then there is one that says we don’t really care about where the stinking rates are. That’s who we can get a double rate cut today and still going lower.”
Cramer said he is currently in Silicon Valley and after talking to many companies, he feels tech companies do not care about interest rates since they are selling to businesses. Cramer said these technology companies are focused on innovation.
For this article, we picked 10 stocks Jim Cramer recently talked about during his latest programs on CNBC. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Garmin Ltd (NYSE:GRMN)
Number of Hedge Fund Investors: 31
Jim Cramer in a latest program praised Garmin Ltd (NYSE:GRMN) products, saying the company has “unbelievable” fitness watches and fishing equipment.
Cramer said that Garmin is the “real deal.”
“This company has it going people have given up on it they are quite wrong and you are dead right it is going higher.”
Thanks to its high spending on R&D, Garmin Ltd (NYSE:GRMN) has been able to develop a diverse revenue stream. It operates across five segments: fitness, outdoor, aviation, marine, and auto OEM, with the outdoor segment generating the highest revenue and operating income in 2023.
Garmin is known for its innovation, particularly in the aviation and marine sectors, where it is a market leader. In aviation, Garmin Ltd (NYSE:GRMN) has won top honors in Aviation International News’ Product Support Survey for flight deck avionics for 20 consecutive years. In the marine industry, it was recently named Supplier of the Year by Independent Boat Builders, Inc.
The wearable and smartwatch market, where Garmin Ltd (NYSE:GRMN) fitness and outdoor products play a key role, is also expanding. According to Grand View Research, the North American wearables market is expected to grow at a compound annual growth rate (CAGR) of 12.9%. This positions Garmin Ltd (NYSE:GRMN) well for continued growth in these categories.
Garmin (GRMN) holds a strong financial position with approximately $2.2 billion in cash and no debt.
Diamond Hill Long-Short Fund stated the following regarding Garmin Ltd. (NYSE:GRMN) in its fourth quarter 2023 investor letter:
“Other bottom contributors included our short positions in Garmin Ltd. (NYSE:GRMN) and International Business Machines (IBM), as well as our long position in Chevron. Outdoor fitness and adventure equipment maker Garmin benefited from strong growth in its fitness and auto original equipment manufacturer segments. Over the long term, we believe the company’s high-end wearables products will face significant competition from competitors like Apple and Samsung.”
Overall, Garmin Ltd (NYSE:GRMN)ranks 10th on Insider Monkey’s list titled Jim Cramer’s Top Picks: 10 Stocks to Buy and Sell. While we acknowledge the potential of Garmin Ltd (NYSE:GRMN), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GRMN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
