A Key Metric Signals Garmin Likely Had A Bad Fourth Quarter

Social media data indicates Garmin Ltd. GRMN had a rough fourth quarter.

That's according to Andy Swan, the co-founder of LikeFolio, a company that tracks social media analytics among brands and stocks.

Swan was a guest on Friday's edition of Benzinga's PreMarket Prep, where he outlined why he thinks the GPS and fitness tracker manufacturer will report a bad quarter on Wednesday.

"What we do is we track every brand and product made by every publicly traded company on social media, and we look for mentions that indicate that people are buying or have recently bought that product," Swan explained. "For Garmin, when we look at specifically those purchase intention mentions, there was a significant drop-off in the fourth quarter.

Swan, a Benzinga Global Fintch Awards alumni, added that the decline in social media mentions was lower on both a quarter-over-quarter basis and a year-over-year basis. This gives him the impression that Garmin's holiday quarter wasn't great as there may have been "less enthusiasm" among customers.

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Swan emphasized the fact that Garmin's drop in social media mentions was contained to the fourth quarter, but since January there has been a rebound in social media mentions.

"We've actually seen a nice rebound in consumer sentiment, purchase intent stuff, so what we're seeing on Garmin was pretty isolated in the fourth quarter. This isn't a short it and walk away kind of thing," Swan said."

Bottom line, Swan suggested investors looking to play Garmin on a short-term basis may find it advantageous to lean bearish heading into earnings.

Listen to the full interview with Swan at 38:20 in the clip below.

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