Why Garmin Is Incredibly Well-Positioned For The Self-Driving Age

Ivan Feinseth, partner and chief investment officer at Tigress Financial Partners, is the only analyst on the Street with a Buy rating on Garmin Ltd. GRMN.

While some consider Garmin an obsolete personal navigation company, Feinseth looks beyond its earliest focus at a “clever” product range.

Not only does it offer an “incredible” high-end wearable line to support diverse athletics, but it also produces plotters and autopilots for aviation and marine technology. These parts, coupled with a line of dashboard and action cameras that record GPS data, position the firm to capitalize on the trending autonomous vehicle space.

“If you look at the components they make, they make cameras, they make GPS devices, and they make autopilots, and you put those three components together and you have the components for empowering a self-driving car,” Feinseth said Friday on Benzinga's PreMarket Prep radio show. “So I think they will be a key components supplier to the self-driving car. They also have OEM relationships with pretty much all the automotive manufacturers where they supply different components to.”

The OEM Play

While he sees Garmin benefiting from the shift toward autonomous driving, he’s more ambivalent about Tesla Inc TSLA, which is widely perceived a vanguard in the race.

Tigress is neutral on the stock because of its volatility and the difficulty of measuring its valuation

Nonetheless, Feinseth praised the concept, the car and the CEO, calling Elon Musk an “incredible visionary” and the Model 3 a “phenomenal” product. And he sees no problem with the continued emergence of fresh competition.

“The fact that more auto manufacturers are starting to make 100-percent plug-in electric cars brings more people to the marketplace and actually benefits all the companies that will make them,” he said. “I think more competition, more choices in the space is positive.”

Components Beneficiaries

Communication chipmaker Skyworks Solutions Inc SWKS and processor developer Qorvo Inc QRVO also have exposure to autonomous vehicles through their influence in the Internet of Things.

“Everything that has some kind of connectivity is going to most likely have a chip from Skyworks, so they are expanding into the connected car, the connected home,” Feinseth said, noting the same for Qorvo.

Companies involved in the blossoming space tech industry will also rise in the autonomous vehicle craze by improving communication and connectivity between cars. Boeing Co BA, General Electric Company GE and Arconic Inc ARNC are involved in the space race critical to the collection of geospatial data and access to high-speed connectivity.

What’s The Timeline?

Feinseth sees complete autonomy between five and 10 years away, delayed not by development of vehicle-specific technology but by the collection of data from public infrastructure, such as traffic lights and roads. Insurance liability is also a roadblock, as the industry must determine whether the “driver” or the auto manufacturer will be at fault for any incidents.

PreMarket Prep is a daily morning show about short-term trading ideas and technical setups. It airs live from 8–9 a.m. ET here, and the podcast is here.

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