MARKET INSIGHT: Trimble Finds Itself in a Very Good Position

Trimble Navigation Limited () provides advanced positioning product applications, typically to business and government customers. The main solutions served include surveying, agriculture, machine guidance, construction alignment, asset and fleet management, and telecommunications infrastructure. Trimble’s solutions include systems that direct agricultural and construction equipment, surveying instruments, systems that monitor fleets of vehicles and information collection systems that enable the management of large quantities of geo-referenced data.

Trimble also produces components for in-vehicle navigation and telematics systems, and timing modules used in the synchronization of wireless networks. The company’s business model operates through four segments: Engineering and Construction, Field Solutions, Mobile Solutions and Advanced Devices. In 2006, Trimble formed the Advanced Devices segment, which consolidates its previous Component Technologies and Portfolio segments.

The company combines a variety of positioning technologies, including GPS, laser, optical and inertial technologies with software, wireless communications, and services to provide comprehensive commercial solutions. Trimble’s integrated applications allow customers to gather, manage and analyze complex information much faster, making them more productive, efficient and profitable. Trimble’s products are used in more than 100 nations around the world.

Trimble Navigation has a very healthy fundamental profile with great sales growth and tremendous earning s growth. Revenue for the second quarter of 2007 was $327.7 million, an increase of about 34 percent from revenue of $245.3 million in the second quarter of 2006. Net income for the second quarter of 2007 increased 23 percent, to $35.0 million, compared to net income of $28.5 million in the second quarter of 2006.

Technically the stock appears to be in position to move up to the $47 per share area. The company offers a very liquid options market with lots of open interest and respectable bid/ask spreads. There are LEAPS available with the current cycle extending out to January of 2010, providing ample time for the options trader to take advantage of this particular opportunity.

Figure 1:  Elliot Wave-4 Buy Pattern for Trimble Navigation
(Source: Profit Source)

Happy Trading.

Jeff Neal 
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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