Trimble Navigation (TRMB) announced late last month its software will be used in the establishment of a national Global Positioning System, or GPS, infrastructure network in the south of Poland. The company’s network will be utilized by professionals in the surveying and engineering fields to obtain high accuracy (with resolution down to the centimeter) global positioning without the use of base stations or specialized software. Experts say this will significantly increase efficiency and productivity.
Audio Podcast:
An audio podcast of this article is available at: poweropt.com/podcasts/2007_01_05_Trimble.mp3
Applications for the network include: surveying, road and bridge construction, archeological excavation, and the management of emergency medical and rescue teams.
This development fits nicely with Trimble’s recent acquisition of @Road, Inc. @Road currently provides mobile resource management in North America and Europe. The company provides a service to connect mobile workers in the field to corporate data on demand. This feature helps companies measure mobile workforce performance and manage mobile assets.
Acquisition of @Road INC.: Trimble Navigation said in early December it would buy @Road Inc. (ARDI) for about $496 million, or $7.50 per share.
The transaction paid a 12 percent premium on @Road’s closing stock price when the deal was announced. @Road is currently trading at around $7.30 a share.
Trimble will pay for the deal with cash on its balance sheet, available borrowings under an existing line of credit and a new term loan. The deal is expected to close in the first quarter of this year, subject to regulatory approval.
Competitors:
Competitors for TRMB include: Garmin Ltd. (GRMN), Leica Geosystems Holdings AG (private), TOPCON Corporation (private), NovAtel Inc. (NGPS), SiRF Technolgy Holdings Inc. (SIRF), and Symmetricom Inc. (SYMM).
Company Profile:
Trimble Navigation Limited develops, manufactures, and sells advanced positioning systems worldwide. Among many other services, the company offers GPS and robotic optical surveying instruments for surveying, planning, design, site preparation, and building processes. Trimble also provides manual and automated navigation products for farm equipment. This can be used for leveling agricultural fields and gathering information on fixed infrastructure and natural resource assets. The company has joint ventures with Nikon Corporation and Caterpillar. Trimble Navigation was founded in 1978 and is headquartered in Sunnyvale, California.
Potential Trades:
| Covered Call – Trimble Navigation Ltd. (TRMB) $ 53.57 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPTION | Strike Info |
Opt Bid |
%Dnsd. Prot. |
%If Inch. |
%If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TUHBK | 07 FEB 55.00 | $2.10 | 3.90% | 4.00% | 5.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bull-Call Debit Spread — Trimble Navigation Ltd. (TRMB) $ 53.57 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sell Opt |
Strike Info |
Bid Price |
Buy Option |
Strike Info |
Ask Price |
%Return | Break Even |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TUHBJ | 07 FEB $50 | $5.20 | TUHBI | 07 FEB $45 | $10.00 | 4.20% | $49.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The covered call trade, an out-of-the-money covered call, offers 3.9% downside protection and a potential profit of 4.0% (46 days) if the stock remains unchanged. If the stock rises to or above its $55.00 strike price, the potential profit becomes 5.2%.
The second trade is a bull call debit spread. This trade offers 4.2% potential profit if the stock remains unchanged or increases. If the stock decreases below the break-even price of $49.80, the investment begins to lose money. If the stock price goes below the lower strike price, the entire investment is lost. The net cost of this trade, per 100 options, is $460.00.
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[tags]GPS, @Road, North America, Europe, Leica Geosystems Holdings AG, TOPCON Corporation, Nikon, Caterpillar, Sunnyvale, California, ARDI, At Road Inc., GRMN, Garmin Ltd., NGPS, NovAtel Inc., SIRF, SiRF Technolgy Holdings Inc., SYMM, Symmetricom Inc., TRMB, Trimble Navigation Ltd., bull call debit spreads, covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options[/tags]