NVT

Navteq had a great quarter and the stock has taken off too -- from the $38 I paid for it just a couple of months ago, to the $65 level of now. The valuation has expanded but its not too egregious -- especially if further upside is likely. If you haven't taken some profits yet, I would suggest it. The owners have changed to some extent -- more momentum oriented -- that will sell at the first sign of a slowdown.

I think GPS/location based services have a great growth potential but its hard to predict any individual quarterly numbers. Navteq is one step removed from the customer -- they sell to portable device OEMs like Garmin or to in dash suppliers like BMW so its even harder for them to predict demand -- they are not in touch with end users. The business is changing -- adding features like traffic, points of interest, etc. while also adding platforms -- started in dash in autos then portable devices and now smartphones too. Managing all this change is not easy -- lots of moving parts that Navteq has only limited control over.

Navteq mentioned various growth drivers on the call and said 2008 is when they will be ready or have a more material impact. That is what concerns me -- can they maintain the momentum when a lot of their future growth drivers are 2008 events. Luckily we are heading into the seasonally strong period for consumer technology products. They also mentioned that retailers are planning on adding shelf space to GPS models -- that should help unit growth maintain its momentum.

Longer term the growth drivers are there -- can't believe that location based content won't continue to become more valuable especially as we move to the iPhone paradigm of carrying around full functioning Internet enabled computers in our pockets. That doesn't mean the ride is straight up -- look at all the notes on seekingalpha.com now about NVT -- where were all these people 2 months ago when the stock was a bargain and growth was a question mark? all that changed was the momentum -- do you think it can't change back? Just advising to take advantage of the volatility -- if you trim now, then you can buy more on a pullback because they only grew portable units 100% instead of 200% or whatever the excuse is for slowing mo.

If the stock keeps rising before the next EPS report, I will be more inclined to reduce the position some -- momentum investors are wonderful on the way up but not as much fun on the way down!