E TomTom Should Look Outside Europe For Fleet Management Solutions

One of the most interesting stocks listed on Euronext Amsterdam Stock Exchange is a company called TomTom (TMOAY, TMOAF).

For investors unfamiliar with TomTom - the company is leading in the personal navigation devices (PNDs) market where it competes directly with Garmin (GRMN). The company also sells navigation components (maps, software, and traffic information) to customers in the automotive sector.

Lately, TomTom has become a leading provider of fleet management solutions, especially in Europe. On top of that TomTom creates GPS sports watches, and launched the TomTom Bandit Action Camera in May this year. This camera was the first of its kind with a built-in media server, designed for action and competing directly with GoPro (GPRO).

Most of the time TomTom is mentioned in the financial media it is due to rumors that the company is being taken over by Apple (AAPL), Samsung (SSNLF) or another tech giant.

This time, it is different, and I urge TomTom to have a look at a company in the telematics sector. As mentioned before, revenues from fleet management solutions that TomTom shares under their Telematics business unit is growing at a fast clip.

Market size

Market research firm MarketsandMarkets expects the commercial telematics market to grow from $20.02 billion in 2015 to $47.58 billion by 2020 worldwide. In market size, Europe is expected to be the largest, while the Middle East & Africa, Asia-Pacific (APAC) and Latin America are expected to experience high growth figures. 

The Telematics market is growing at a fast clip, and relative value analysis shows that there are some US-listed undervalued opportunities in the telematics industry that TomTom could snap up. Two of them I will discuss here.

The first one is a company called Pointer Telocation (PNTR).

Pointer Telocation Ltd., based in Israel, is, for the most part, a provider of AVL solutions provider to Fleet, Automotive, Insurance, Cargo and Public-safety industries. Investors that are not familiar with the name AVL, AVL means Automatic Vehicle Location Device.

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Dutch Trader is long MiX Telematics (MIXT). Please do your own research before investing. It is crucial ...

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Joe Economy 5 years ago Member's comment

In my opinion, companies like TomTom and Garmin that produce mapping systems often used in GPS systems are going to see continued competition from mobile personal apps like Waze which enable people to have a mobile navigation system on their smart phones for free. GPS systems are going the way of CD players to be replaced by mobile app technology. Any thoughts?

Carol Klein 5 years ago Member's comment

I used to feel the same way, but I've found value in having a stand alone GPS since sometimes you need to be on your phone at the same time. There's nothing worse than driving in an unfamiliar area, using your smartphone GPS and then getting an important call in. Or being on a call and suddenly realizing you are lost. That's why I ended up using both.

Lacey Cahr 5 years ago Member's comment

Personally agree with you Carol. But I think @[Joe Economy](user:5642) and @[Dutch Trader](user:22547) are right that the future lies in mobile. Regardless, I'm curious to see if TomTom follows the authors advice which sounds promising.

Kurt Benson 5 years ago Member's comment

I never understood why they didn't give up on the device market all together and focus on software. There is no reason why TomTom or Garmin couldn't be the go-to app for all smartphone GPS enabled devices. Costs would go down and they could focus on building the best app out there and charge a monthly subscription fee.

Dutch Trader 5 years ago Author's comment

That is for sure Joe, that's why both companies are broadening their horizons.

Sander Haaijer, CFA, CAIA 5 years ago Member's comment

TomTom's primary Amsterdam listing goes by TOM2 (ISIN: NL0000387058). Remarkably, TomTom is debtfree. "One of the most interesting stocks listed on Euronext Amsterdam Stock Exchange is a company called TomTom (TMOAY, TMOAF)."

Dutch Trader 5 years ago Author's comment

Thanks Sander, indeed the main listing is in Amsterdam with another ticker. Unfortunately, many US platforms don't support outside tickers, so I couldn't use it here.

Susan Miller 5 years ago Member's comment

Both $TMOAY and $TMOAF seemed to work here for me. I am now following them both, as well as $PNTR $MIXT (and you) thanks!.