"In a small town, when something breaks down, you don't wait around for a new part, because it's not coming. You make it yourself."
- Robert Noyce

There is a billboard on I-35 I occasionally drive by near the Garmin campus in Olathe. The tagline: "Imagine landing a job your mom can brag about." It is recruiting engineers from the region, think Kansas State or my alma mater Iowa State, and as it goes there are something like 4,000+ Garmin jobs in this KC metro area. I think this sentiment is pretty real (you’d be happy to see your college grad work at Garmin for a few years) and a more wholesome image than you typically expect from a publicly traded tech company. 

What they do

Garmin makes gadgets people use to do things outdoors. These include running watches and bike computers. Marine sonar (find where the fish are) and chartplotters for boats. Cockpit systems for airplanes. You will recall the original car GPS units that made them famous, they still make and sell them (despite the alternatives that threatened to disrupt the company in the ‘software is eating the world’ era of the 2010s). 

Why we own it

• With that in mind, Garmin runs their own sort of skunk works (my words). The aforementioned Kansas City engineers develop/nurture more products than the market asks for, then the company leans into whichever ones the environment rewards at a given time. As an example, the inReach satellite messenger (e.g. satellite text messaging) came from a Maine mapping company they bought in 2016 and is now a real business.
  
  
• Most of their products are too small and specialized for an Apple or Samsung to bother with. Politicians aren’t really drafting antitrust legislation on the fish finder industry, for example. In other words, Garmin has spent a few decades building brands in niche categories that Big Tech has avoided.
  
  
• Min Kao founded the company in 1989 with the late Gary Burrell, (Gar + Min = Garmin). The two founding families still hold something like fifteen percent of the company between them. Cliff Pemble was one of their first engineers hired and has run it since 2013. They’ve had no debt since 2006. They build their own products, in their own factories, which almost no one does anymore.

Where it fits

Garmin is in our compounder bucket. Similar to a Heico or a Deere, it’s the sort of position I would hope to still own in ten years. I started buying it for client accounts in November 2023 around $120 a share. Your cost basis will differ depending on when you came aboard, added funds, and so forth.

What has to be true

• Success in small acquisitions. Garmin has bought a number of niche companies and folded them in.
  
  
• The long tail of the proverbial skunk works has to keep working as the company grows. You would like to see another inReach every few years, a small product that grows into a nice business.
  
  
• What happens if/when the running watch boom fades? Fitness and outdoors are where the money is made today, while lines such as aviation and marine are much smaller.

Bottom line

We own Garmin because it looks like the kind of company possibly still here in 20-30 years, quietly making things for people who want to ‘touch grass’ while the world goes more digital.

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