Buy Firms That Have New Products, Which Drive Earnings And Sales (Investor's Business Daily)

Throughout stock market history, companies that have proved themselves as innovators have realized the biggest gains. From Boeing's (NYSE: - ) jets to Apple Computer's (NasdaqNM: - ) iPods, breakthrough products have fueled lofty advances for the most innovative companies.

Garmin (NasdaqNM: - ) is the leading maker of portable navigation devices, a firm that fits the profile of 95% of stock market leaders. It's a company with new products, services, management or market conditions.

Garmin has revolutionized the way we get around town. The Kansas-based company makes devices with GPS technology for cars, boats, planes -- even hikers and cyclists. It rolled out 34 products in the first quarter of this year.

First-quarter earnings surged 86% as sales zoomed 67% year over year. Garmin shot past Thomson First Call consensus earnings estimates by 6% to 28% in the past four quarters. Garmin expects 2006 earnings to exceed $3.40 per share on sales of more than $1.4 billion.

Sales in Garmin's auto unit rocketed 252% from the year-ago period, as more new cars come built with navigation devices. In May the firm released the StreetPilot 2820, a gadget with Bluetooth wireless connection, for cars and motorcycles. The StreetPilot lets users make phone calls hands-free and even contact hotels, restaurants and other points of interests from the database.

A computer voice gives drivers turn-by-turn directions and helps them avoid traffic jams. Users can get real-time traffic information, including alerts to accidents, construction and road closures, by subscribing to an FM Traffic Message Channel or XM NavTraffic.

The device comes with an audio book player and MP3 player that can sort music by artist, album, song and genre. Garmin will begin selling the StreetPilot 2820 in June for $1,099.

The stock broke out of a second-stage, cup-with-handle base in March (point 1). It gapped up 10% May 3, thanks to its bullish first-quarter earnings report (point 2). It's extended 6% from its last buy point of 89.19. That's 10 cents above its highest price before the stock bounced off its 10-week moving average.

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