Trimble Navigation Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of geographic positioning expert Trimble Navigation (NAS: TRMB) got a clear signal today, jumping as much as 21.3% overnight on heavy trading.

So what: Trimble's second-quarter report looked terrific with 22% year-over-year revenue growth and dramatically higher earnings, at the same time as archrival Garmin (NAS: GRMN) flunked its own report. Analyst firm Canaccord Genuity followed up by upgrading the stock to a buy, completing a trifecta of good news.

Now what: This Garmin-Trimble dynamic is the exact opposite of the action three months ago, when Garmin beat expectations and Trimble fell short. In this age of universal GPS and navigation systems on every tablet and smartphone, you'd expect this industry to suffer. Then again, both companies -- and Trimble, in particular -- rake in plenty of cash from end markets where an iPhone or Android phone just won't do, like heavy construction projects and aerospace navigation. Underdog TeleNav (NAS: TNAV) is not so lucky thanks to its heavy consumer focus, and it suffered dearly in last week's turn on the earnings stage. This report was a setback for two of our newsletters that are shorting the stock based on a theory of runaway valuation.

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At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. Motley Fool newsletter services have recommended creating an iron condor position in Garmin and shorting Trimble Navigation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

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