Wearable Technology - FitBit (FIT) & Garmin (GRMN)

The rapid rise in the use of wearable technology has created new avenues of revenue for various market players globally. From fitness, fashion and leisure to the healthcare sector, the growth of the sector is a long term secular trend that has hold plenty of runway for companies who are position to take advantage of the advancement and adaption to mega-trend.

According to IDTechEx Research, wearable technology mainly concerns electronic devices, apparel and textiles - an industry will see three-fold growth from over $24 billion today to over $70 billion in 2025. The dominant sector will be the increasingly merged healthcare/medical and fitness/wellness sectors, which will exceed the advanced infotainment sector in value if not in numbers.

	One of the companies investors could consider putting to their portfolios in order to gain sector exposure is FitBit Inc (Code: FIT) a technology company, provides health solutions in the United States and internationally. The company offers a line of devices, including Fitbit Surge, Fitbit Blaze, Fitbit Charge 2, Alta HR, Alta, Fitbit Flex 2, Fitbit One, and Fitbit Zip activity trackers; Fitbit Ionic smartwatches; Fitbit Aria 2 Wi-Fi smart scales; and a range of accessories, such as bands and frames for its devices, as well as Fitbit Flyer, a wireless headphone designed for fitness. It also offers Fitbit online dashboard and mobile apps that sync automatically with and display real-time data from its wearable devices; and Fitbit Coach that offers exercise programs through personal trainer and yoga apps. The company sells its products through consumer electronics and specialty, e-commerce, mass merchant, department store, club, and sporting goods and outdoors retailers; wireless carriers; distributors; and Fitbit.com, an online store, as well as directly to consumers. FitBit Inc Fundamental Statistics: Index:  Nasdaq Share Code: FIT Market Cap: $1.4bn Total Revenue: $1.5bn Gross Profit (ttm): $690.9M     EBITDA: $-141.11M      Net Income: $-358.02M
	Currently, FIT's financial statements don't make for pleasant reading, with margins having been under pressure, the company having recorded a loss for the full year and research and development costs rising. While there are currently more negatives than positive at this stage, it is worth acknowledging that the share price certainly discounts the murky outlook for the company - not the sector. From it's IPO of $30.50 in June 2015 to a high of $50.90 two months later, the share has since fallen precipitously to it's last close of $5.84. Some of the fundamental metrics that may however provide some encouragement include the following: Price to Sales: 0.95x Enterprise Value To Sales: 0.57x One of the other standout fundamental features is the FIT's liquidity. The company trades in a Net Current Asset position, meaning that it's Current Assets exceeds it's Total Liabilities. When measuring Market Cap versus Net Current Assets, the share trades at a multiple of  2.36 times.   Technically, we have seen a big base being built. This follows the price having declined from it's peak of $51.90 during August 2015. The 40-week moving average has stopped declined and is now showing signs of stabilization with the price starting to trade above this level.  Another share investors could consider adding to a long term portfolio is Garmin Ltd (Code: GRMN), which designs, develops, manufactures, markets, and distributes a range of navigation, communication, and information devices worldwide. It operates through five segments: Auto, Aviation, Marine, Outdoor, and Fitness. The company has, over the last 20 years continued to invest in Research and Development and while Earnings and Revenue have been lumpy, Book Value has grown at a compounded annual growth rate of CAGR of over 16% per annum. Remarkable!  Over the last two months the price has cleared two resistance levels, however is still down significantly from it's decade long highs. The long term price action is also showing a willingness to commence it's long term bullish momentum.

Both Fitbit and Garmin provide investors with access to the growth of the wearable technology sector - albeit with different levels of risk. For long term investors, the current levels of both shares appear attractive to be purchased and could provide meaningful upside within a long term portfolio.