Garmin, a high-flying manufacturer of stationary and hand-held navigation products, is probably the hottest stock in the world, having risen nearly 100% this year after increasing almost 10-fold since it went public in December 2000. Its run, one pro says, has at least another 50% to go over the next 12 months.

Another pro warns, however, that buying the stock “could be equivalent to swimming with crocodiles if the market turns down.”

Garmin, which boasts the country’s hottest new auto product, is a major player in global positioning system technology, which enables the user to wirelessly deliver geographic location data through satellite communications. Or, to put it simply, it directs the user to location B from location A.

Garmin is “the world’s most exciting stock right now,” London money manager Marcus Raab of Raab Associates says. “It’s no screaming bargain, but it’s a $100 number on the way to $200 because its growth prospects remain awesome.”

Investment adviser Richard Moroney likens Garmin to Apple. “It has that Apple mystique, offering a product that everyone wants.” Two years ago, he says, everyone thought Apple’s stock was expensive; today, it’s even more expensive.

Garmin, which wrapped up last year at $55.66, hit an all-time high a few days ago of $105.75 and closed yesterday at $102.54.

Ballooning earnings have sparked this meteoric rise, with per-share profits climbing to $2.35 a share last year from 53 cents in 2000. That growth has continued in 2007, with first-half earnings rising almost 69% from year-earlier levels. More lofty gains are expected, with consensus earnings estimates calling for $3.33 a share this year and $3.94 in 2008, which are equivalent to projected earnings gains of 41% and 18%.

One Garmin bull, analyst Tony Sagami of Weiss Research of Jupiter, Fla., pegs earnings growth at a blistering 40% a year over the next three to five years on continued annual 50% sales gains. As such, he sees the stock tacking on at least another 50% increase over the next 12 months.

“Garmin is the world’s no. 1 technology stock and will show astronomical revenue growth,” he says. “I recommend it strongly because common sense tells you the stock’s run is far from over.”

Garmin, which was incorporated in the Cayman Islands and has its main manufacturing facilities in Taiwan, also applies its technology to aviation, boating, and fitness products (for joggers and cyclists). Last year’s sales ran $1.7 billion. Garmin’s GPS system dominates the American market, with about a 60% share, and is a strong no. 2 in Europe behind European manufacturer TomTom.

Mr. Sagami reckons it’s only a matter of time before the Federal Aviation Agency mandates conversion to a GPS system for America’s airlines. He figures if Garmin beats out other defense companies for the FAA contract, “Garmin is a $200 stock.” In any event, Mr. Sagami is convinced Garmin will snare at least a big share of that multibillion-dollar pie.

A big plus, as he sees it, is the company’s distribution relationships with such established companies as Target, Circuit City, Best Buy, and Wal-Mart, plus original equipment manufacturers such as Ford, BMW, Honda (for motorcycles), Cessna, Piper, and Premier Marine.

Likewise, he notes, Garmin is debt-free, has about $360 million in cash, and generated $130 million of free cash flow in 2006. It also recently doubled its annual dividend, to 50 cents, and regularly engages in share repurchases.

Mr. Sagami is hardly alone in his enthusiasm for the stock. A total of 439 mutual funds own Garmin, and such giants as Vanguard, Wellington, Capital Research, and Fidelity Management hold multimillion-share positions.

Sounds good, but skeptics abound. Indicative of this, latest figures show a short interest (a bet the stock price will fall) of just under 15 million shares, or 11.4% of the floating supply.

One short-seller admits “shorting Garmin could be tantamount to walking in quicksand,” but he argues the current share price allows for no shortfalls in revenue and earnings growth, absolutely no disappointments of any kind, and no serious economic slowdown. Any of which, he believes, would knock down the stock a fast $30 to $40 a share. “Reality inevitably catches up Wall Street fairy tales of great, uninterrupted growth forever, and that’s Garmin,” he says.

Mr. Moroney, while bullish on the stock — he thinks it could hit $120 in the next 12 months — also hoists warning flags. In particular, the research chief of the Dow Theory Forecasts newsletter cites overly exuberant investor expectations, lack of any room for a slowdown in sales growth, competition, and the absolute need for Garmin to remain at the cutting edge of technology.

“It’s not a cheap stock and there’s no room for error,” he says, but he reiterates “that’s exactly what the Street was saying about Apple in 2005.”

dandordan@aol.com