A lot of excitement with GRMN today as the company gets ready to report earnings on Wednesday Morning. A lot of traders were trying to get positions established today ahead of the news. I expect more of the same tomorrow with a good chance that the stock hits a 52-week high.
So the question remains about how much upside is baked into the stock prior to earnings? I think that it is anybody's guess, but my guess is that "it depends". I am not trying to cop out of an answer, but it really depends on how much GRMN beats estimates.
The whisper number is considerably higher than the $0.81 EPS and the $683 million in revenue that are the analysts consensus. I think that anything short of $0.86 and the stock sells off on the news. Anything larger than $0.90 and the stock goes higher considerably.
One other factor to consider will be how the company responds to questions on the conference call about the Nokia/Navteq deal and what the company's plans are with respect to the map data content sector. It is conceivable that the stock gaps up and then falls based on comments, so I would not relax after the Press Release.
I lightened up with GRMN calls today again and own only a small token going into earnings at this point. I am just protecting some sizable profits from in-the-money calls purchased a while ago. I may look at out-of-money calls and puts to establish a strangle trade tomorrow. I need to run the valuation model before I commit.
In other news, I am a little depressed to see the weakness in ROCM. The stock needs a buyer. I also watched TIE again today, but held my fire on buying more puts at the moment. It should be interesting tomorrow.
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