Gentex CorporationGNTX

Gentex estimates that of all the vehicles sold annually worldwide, only 19% have an interior auto-dimming mirror. This leaves plenty of room for more growth.

Many of the advanced features Gentex offers can be packaged and sold as optional equipment. Because OEMs can earn large margins on optional equipment, they are less likely to pressure Gentex to lower prices.

Safety legislation, such as the Kids Transportation Safety Act of 2007, requiring rear backup warning technology, could be a windfall for Gentex with its rear camera display mirror. Although the law will not require the technology to be implemented for up to six more years, automakers are likely to bring this technology into their vehicles far sooner because Gentex already has the product and consumers will want a high-tech feature that can save lives.

Auto-dimming technology has applications to other parts of the car, such as headlights, and other nonautomotive products, such as airplane windows. Although tiny now, markets outside the auto industry could prove to be very large businesses down the road.

The company's financial health is so strong that it can survive the current downturn in the U.S. easier than other auto suppliers can. Read more 

General Motors is Gentex's second-largest customer, and it is struggling, which could affect Gentex's revenue growth.

Technological advantages can disappear very quickly if a better product is invented by a competitor.

As auto-dimming mirrors become available on more vehicle models, OEMs may want to lower their own costs by pressuring Gentex to reduce prices or by supporting emerging competitors. Read more