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Christmas is over, and some people are sad, some glad.
We're sure the post-holiday depression has already set in for half of you. The rest of you are just happy the bank account drain has finally been plugged.
Players in the Strategy Lab Open are empathetic and have good news for you. News that will not only turn those frowns upside down but possibly ease that little problem we call the After Christmas Cash Flow Crunch.
Below are four companies that are each in an extremely profitable situation this holiday season. These companies have the hottest new products, and their merchandise is in high demand.
What does this mean for you?
Well, if these companies rake in higher-than-average revenues for December, then we will see a nice spike in the corresponding quarterly earnings announcement. And as we all know, earnings are one of the main catalysts for stock price appreciation.
It seems basic, but sometimes the most fundamental ideas are the most profitable. So without further ado, here are the four "diamonds of the holidays":
Garmin
Garmin (GRMN, news, msgs) is a global provider of navigation devices, most famously known for its Global Positioning System (GPS) technology. It designs, manufactures and markets a variety of handheld and portable GPS products.GPS was without a doubt one of the hottest holiday gifts of 2007. I know a number of people who purchased this revolutionary technology for a loved one this Christmas. I even bought a Garmin StreetPilot for my father not too long ago. Garmin is a front-runner in the GPS market and will be for quite some time.
Andrew Carlson, a Strategy Lab Open competitor, shares his opinion on Garmin:
"The current EPS (earnings per share) estimates for 2008 ranges from 3.30ish to 4.60ish so the stock should have room to run. . . . The scenario for the company is even brighter if prices hold up and they make inroads into the European market." (Read the full post here.)
Here are some of Garmin's recently announced financial highlights as of the end of 2007's third quarter:
- Year-to-date revenue was $1.96 billion, up 69% from $1.16 billion during the corresponding period of 2006.
- The automotive/mobile segment's revenue increased 109% to $1.34 billion.
- North America revenue was $1.23 billion, up 76% from $700 million.
- European revenue was $631 million, up 58% from $400 million.
- Asian revenue was $101 million, up 60% from $63 million.
- Diluted earnings per share were $2.50, a 64% increase from $1.52.
- Nearly 2.7 million units were sold in the third quarter of 2007, up 119% from the same quarter in 2006. Year-to-date units sold increased 97%.
One cannot argue with growth numbers like these. With the amount of buzz in the air about GPS, it's a distinct possibility that Garmin is going to blow away fourth-quarter revenue and earnings expectations.
Apple
Of course I couldn't leave out Apple (AAPL, news, msgs), the darling of the investor community. The companydesigns and manufactures personal computers (the iMac and iBook), portable digital music players (the iPod) and mobile communication devices (the iPhone).The newest and most attractive technology for consumers this holiday season has been the iPhone, the extremely user-friendly music player, cell phone, Internet browser and personal digital assistant. I can say one thing about Apple from personal experience: The stores are always packed with people looking to drain their bank accounts to be a part of the posh Apple community.
Apple's stock price has gone up more than 110% since the start of 2007, and it doesn't look like it is stopping anytime soon. The iPhone, iMac and iPod were the quintessential Christmas gifts of 2007.
- Video: Where to invest in 2008
"The bottom line for Apple is that Mac laptop and desktop sales to both consumers and corporations remain the biggest growth story in the PC industry, and it's getting a major boost by the new Leopard operating system," Strategy Lab Open competitor Paul Carton writes. (Read the full post here.)
Financially, Apple is an investor's gem. It has no debt and more than $15 billion in cash. Apple is making so much money that it can finance its own growth. This is an excellent sign of company health and future prosperity.
Apple's financial results for its fiscal quarter ending Sept. 29 are as follows:
- The company posted revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share. These results compare with revenue of $4.84 billion and net quarterly profit of $542 million, or 62 cents per diluted share, in the year-ago quarter.
- Gross margin was 33.6%, up from 29.2% in the year-ago quarter.
- International sales accounted for 40% of the quarter's revenue.
- Apple shipped more than 2.1 million Macintosh computers, representing 34% growth over the year-ago quarter and exceeding the previous quarterly record for Mac shipments by 400,000.
- The company sold 10.2 million iPods during the quarter, representing 17% growth over the year-ago quarter.
- Quarterly iPhone sales were more than 1.1 million, bringing cumulative fiscal 2007 sales to 1,389,000.
Apple is a surefire winner right now, and with Steve Jobs at the forefront, I don't think this company can ever do wrong.
Continued: Taser International and Research in Motion
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