NVT - Source of GPS Software, Data, and Maps Message Board

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Technology Stocks : NVT - Source of GPS Software, Data, and Maps

NVT 112.40

-1.7%

Nov 3 3:59 PM EST

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To: JakeStraw who wrote (140)	5/4/2007 12:41:37 PM
From: tech101	of 211

All Roads Lead to Navteq By Ryan Fuhrmann, CFA, Motley Fool May 3, 2007 A recent article covering Sunday's oil tanker explosion in San Francisco highlighted the troubles of using online mapping software to plan trips. What happens when a route suddenly ceases to exist because of road damage or, worse, a collapsed bridge? Consumers have yet to see the day when road conditions are updated instantaneously using Yahoo! (Nasdaq: YHOO), Time Warner's (NYSE: TWX) MapQuest, or Google (Nasdaq: GOOG) map websites. But updates are becoming more timely, thanks to companies such as Motley Fool Stock Advisor recommendation Navteq (NYSE: NVT). Navteq has created one of the most extensive digital map databases and related software platforms, which it licenses and sells to online map providers and automotive firms such as Toyota (NYSE: TM) and Honda (NYSE: HMC). It also recently inked a deal with Kia and Hyundai. Garmin (Nasdaq: GRMN) and Europe's Tom Tom provide many of the market's increasingly popular handheld mapping devices. But I was originally driven to Navteq by its software-based business model, which translates into high levels of profitability after initial database and software program costs. Navteq's first-quarter earnings release earlier this week illustrated its cash-generating abilities, as free cash flow exceeded reported net income by a wide margin. I'd estimate Navteq is trading at close to 29 times this trailing free cash for 2006 -- close to what the stock trades for on a forward earnings basis. That means shares have some aggressive growth assumptions baked into them. I found Navteq's stock a better deal last fall, when it fell below $30. But if Navteq proves instrumental in bringing real-time traffic updates to drivers and web surfers, investors could see a wide-open road to further gains ahead. fool.com

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