I am new to this board, having had LEIX pop up on a recent stock screener I use. I am already an investor in GRMN (in at around $32), and am a big believer in the LT growth potential for GPS devices. However, I don't see how LEIX can compete with GRMN.
- GRMN is almost 8x LEIX in sales.
- GRMN does its own manufacturing (not sure about LEIX); so it can keep its prices down (no middle man)
- GRMN is spending $$ in consumer advertising, establishing its brand both domestically and internationally (with new deal with Yao Ming)
- On Amazon, a large % of people that check out LEIX products tend to buy GRMN; while a majority of people checking outt GRMN products tend to buy GRMN.
If anyone out there can give me good reasons to buy LEIX that either counter the above or offer other pluses that I have not considered, I would greatly appreciate your input; and I think it would make good conversation for the entire board.
Don�t post here often, but I hate bashers who clutter up the board with inane comparisons that obfuscate the truth in hopes of salvaging their own meager portfolio.
Let the numbers speak - where do YOU think the growth will be?
LEIX PE 13.25 Market cap 130M
GRMN PE 27.69 Market Cap 6.47B
Why would you refer to me as a Basher? Or insult me because of my posts? Does raising reasonable, rational discussion points on this board get equated with bashing? Isn't that one of the real purposes of these discussion boards? To discuss different POV's, issues related to the company for the benefit of all? I am surprised by the hostility.
I couldn't agree with you more on the bashers and the clutter. I wish they'd find another board to
spread their manure on and leave this one to people who may have something constructive to say.
great observations and question.
I've been asking myself the same question for years, having bought garmin in '01. It's offered a bumpy ride in the right direction. While I'm obviously long, I've also traded grmn short term (mostly losing) and bought calls (mostly winning). But I've followed LEIX, as well as NVT, TRMB, SIRF, HAR, COBR, NGPS, MAPS in varying detail for years. They're all related to gps, where I've chosen to concentrate my security research.
I could have done very well in LEIX, as well as TRMB (made some on calls here, and should have bought some yesterday), NVT (I still don't know why I don't tuck away this baby), SIRF (did their rise today say something about garmin?), HAR (they are further along than anyone to take over the car cockpit like garmin has with general aviation). COBR is a loser, NGPS a daytrader's playground, and MAPS is a sleepy software company.
The point is that a rising tide lifts all boats; gps is booming and will continue so for a while. I think there's room for numerous competitors for the forseeable furture, providing they are sound well-run businesses. I'm more confident on that with garmin than lowrance, as I prefer their management, capital structure, and business model.
That said, I think the iway is doing fine; has it's uses, and it is consistently in the amazon top 25 all-gps, not bad for a foot in the door. They may surprise, and it's tempting to buy, but I'm afraid garmin will hurt them in the fishing business at the same time. The core of lowrance's business is up against a formidable competitor in garmin, while as a contrast, garmin's core business (which I think is and will continue to be aviation) seems secure with better growth prospects.
Thanks for your thoughtful and totally rational post! I am not here to bash anyone or LEIX for that matter; so I appreciate the thoughts and feedback received from all.
One additional comment to throw into the mix since my last post: Katrina. If a vast majority of LEIX's sales are in an industry (boating) that is, at least for a key part of the market, discretionary, what happens when it starts costing boaters well over $1K to fill their tank? Is this the part of the GPS industry you want to bet on during rising oil prices?
Quoted from mstgsh
"They may surprise, and it's tempting to buy, but I'm afraid garmin will hurt them in the fishing business at the same time. The core of lowrance's business is up against a formidable competitor in garmin, while as a contrast, garmin's core business (which I think is and will continue to be aviation) seems secure with better growth prospects".
LEIX is by far the established leader in the fishing business....always was and always will be. I am some what a fishing nut and talk to the pros on occasion. Who has Garmin in their boat? No one. Go to the fishing shows and the Garmin reps are falling asleep, over at LEIX booth they are 3 or 4 deep. This is brand identity and LEIX would have to screw up big for a long time to lose this.
Yup, a company like Garmin can get their product in Wallmart or Target but what comes preinstalled at the Marina?...LEIX. The fatter margins are with the better units and there LEIX rules. People who fish seriously are discerning customers.
"The funny thing is, I don't follow competitors that I don't feel are a threat to my investments. If they're not a threat, I can safely ignore them.
You seem to spend an awful, awful lot of time bashing LEIX. If they're as bad a company as you claim, why bother? What do you have to gain? Methinks thou doth protest too much."
The sooner people realize that Garmin has built an awfully powerful company with a very wide moat, the sooner I retire.
Magellan and TomTom are not going to do well against Garmin in the coming years, and LEIX doesn't stand a chance.
The funny thing is, I don't follow competitors that I don't feel are a threat to my investments. If they're not a threat, I can safely ignore them.
You seem to spend an awful, awful lot of time bashing LEIX. If they're as bad a company as you claim, why bother? What do you have to gain? Methinks thou doth protest too much.
Doesn't have a chance. Even a high school business student can see that.
1. Who cares a crap about marine sonar. I will grant you Leix sells the most fishfinders in the world, and that by itself was worth a mere pitance of a 50 million market cap. Garmin craps bigger than that
2. The iway sucks big way. Horrible sales, questionable quality, software issues, and simply way too big and heavy to sit on a dashboard. It is already obsolete with no traffic or street names, and Garmin has 6 or 7 products that are far better (albeit with smaller screens) that sell for much less.
3. There is room for multiple competitors, and there are. Magellan and TomTom come to mind. The auto analogy is good one. When the automobile came out, hundreds of small companies rushed in and started making cars. However, within a short while, basic economics (economies of scale and cost advantages)turned this crowded field into just a handful. Garmin is like Toyota, Lowrance is like Tucker.
4. Garmin spends more in advertising in a quarter than Lowrance spends on R and D in a year. Think about it. Something like 60% of Garmins revenues comes from products introduced within the last 12 months. Any new LEIX products hitting the market? I hear they maybe offering the iWay5500 soon. It is a GPS with a 55 inch CRT screen that is mounted on your hood.
5. By virtue of Garmins size and wide portfolio of products, Garmin exerts enormous control over the distribution channels. They have and continue to use this power to crush its competition.
6. Garmin is 60 times larger than Leix.
7. The portable GPS market is being driven by price, and LEIX simply is not competitive. Garmin I3 on Amazon for $339, Garmin C320 for $425, C330 for $550, ique3200 for $350, ique 3600 $415. And these units all work perfectly. You can't appreciate how bad the iWay is until you try several of Garmin's products.
8. All indications are that Lowrance has had nothing but trouble with the iWay. Very poor sales, high rates of returns, much more expensive to develop than budgeted. There is little doubt that the sales generated compared to the amount spent to develop the product is pathetic. Stock is likely to tank after earnings.
9. Scuro Chiaro likes them, enough said. You wouldn't happen to be going in for brain surgery soon?
10. The idiot at LEIX who thought they could enter the GPS market should be fired. Could of told you at the beginning they couldn't do it.
IF YOU DON'T HAVE A COMPETITIVE ADVANTAGE, DON'T COMPETE.
Glad to see more Grmn shareholders bashing LEIX once more. Very sophisticated but bashing none the less.
The proof is in the pudding boys and the street is raising the stock price of LEIX before this quarters earnings. As my broker said, the street knows best.
By the way, compare the stock price of Grmn and LEIX. Growth wise, Grmn is sucking LEIX's dust.
You may have a point....I'm not aware of any specific problems...only mentions of software problems on these boards (mostly from Garmin fans). But, for what it's worth, there is an update available on the Lowrance website. It contains enhancements and probably some fixes if there were bugs in the early version(s) of the software.
I concur 100% with what you are saying and history has proven you right. That's why all of our computers are running IBM's OS2 operating system. That's why Apple Computer will never amount to anything and will never come up with anything new, remember the dismal failure of the IPOD? That is why no one in this country will ever buy a Toyota or a Honda. I could go on and on with additional examples to prove you right.
> But from past experience I've learned to go
> with the best of breed, which currently is
>So far I've been right, as LEIX has gone no
> where this past month.
And that's a good point of differentiation. I'm looking at LEIX as a long-term (> 1 year) investment, not something I'm going to flip in a week or month.
Since I'm not a daytrader, I have no idea what the merits of this stock are if you just care where it will be next week / next month.