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Research In Motion has just recently hit its 52 week low, 53.51. It closed today at 54.84. I believe it was in the low 70's in April. I'm interested to know what you guys think about this company.....undervalued?...a good buy?....too volatile?
 

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I personally don't think RIM is a good buy at all. Apple and android phones have so much momentum it will be hard to stop. RIM may be well established in the enterprise market but I feel their valuation already reflects that part of the business (and may be too expensive at that!)

Several hard-core blackberry users here at work have switched or are planning on switching to iPhones. I've also noticed more and more iPhone users at client sites (eating into RIM core market share).

I wouldn't buy RIM...I'd go short if I had the means (and guts).

In general, evaluating a stock based on where it's share price "was" is dangerous. The outlook in my opinion is not good for this one...
 

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I haven't read the annual, but have briefly perused some of the basic fundamental stats. The company appears to have a number of things going "right" -- no debt, and a very impressive track record of high RoE and net profit margins.

At 4.0x, it's trading at too high a multiple of book value for my likes. (And it's nearly ~6.0x tangible book.) They operated in a very competitive segment where increased pressure from competitors could squeeze profit margins. Anyway ... not a stock for me.

(I have a hunch that RIM could be bought out by Microsoft, Nokia, or Sony at some point, assuming that the government allows such a takeover. But I'm not willing to stake my money on this.)


K.


Aside: As a Canadian who works in high-tech, I personally want RIM to succeed, because I think that it's a good thing for the city of Waterloo, the province of Ontario, and the country as a whole. It attracts bright minds and good talent, and is one of very few high-tech Canadian companies which operates on a truly international stage.
 

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I like it as an investment, but as Dr. V points out, it doesn't have a lot of safety there in valuation.

I think the fears of competition are overblown to some extent: on the one hand, they're a fixture in the smartphone market, and BBM gives them some loyalty (and network effect). They're losing market share, but the overall smartphone market is growing so big and so fast that in an absolute sense they're still putting out respectable growth, and should for years to come. On the other hand, consumer tastes can be very fickle. I see the girls around here all getting BBs now -- the iphone was popular since it was the cool toy that was both a phone and an ipod and a touch-screen video game thingamagig, and better for media/websurfing... but it's not a particularly good phone, and it's not great for lots of texting.

They're getting down to very respectable P/Es, but so much depends on future earnings, so definitely a fair bit of speculation involved.

I did buy some in the mid-60's, and may buy a bit more at these levels, but all told I'm only weakly positive on it.
 

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Aside: As a Canadian who works in high-tech, I personally want RIM to succeed, because I think that it's a good thing for the city of Waterloo, the province of Ontario, and the country as a whole. It attracts bright minds and good talent, and is one of very few high-tech Canadian companies which operates on a truly international stage.
I agree. And for that reason, I'd be very unhappy if RIM were bought out by Microsoft or Nokia or whomever. Shareholders, of whom I'm not one, might have a different opinion but we need high-tech companies headquartered right here in Canada. Nortel is gone. Corel is a shell of its old self. Newbridge, Cognos and many others have been taken out. Today, we've pretty only got RIM and not much else.
 

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On the other hand, consumer tastes can be very fickle. I see the girls around here all getting BBs now -- the iphone was popular since it was the cool toy that was both a phone and an ipod and a touch-screen video game thingamagig, and better for media/websurfing... but it's not a particularly good phone, and it's not great for lots of texting.
Haha yea pretty much sums it up BB is good for girls who only text/talk

Anyone who wants a computer in their hand gets far more real capability with the iPhone. It has far more key sensors and integrates them with the apps, and a bigger screen with the most intuitive/responsive touch

The latest iPhone pretty much takes away all BB advantage for work email except the physical keyboard. I use them both on a daily basis and once you get used to the touch keyboard I find it faster and far more relaxed, not to mention quiet. I actually notice when anyone uses the iPhone they lay back or sit naturally and when someone uses a BB they always hunch over. I can type easily with 1 hand on a iPhone or in a rush with 2.


I am constantly amazed by the iPhone and so are people around me who all carry work BB. For example during the G8/G20 I used it to instantly make radar shadow calculations using an app that calculates triangulation by pointing the camera to the top of an obstacle. The same app also takes pictures and stamps all this info for future ref including position, alt, bearing, time, angle of elevation/horizon. I could easily design an app specifically for my purpose that takes into account antenna height, areas of interest etc and graph what I want...


I think Google is the best investment today because they have far more growth potential with Android. All they would have to do to convert me is stop letting Apple use their Google maps, voice search, Google local, Gmail, Google finance etc etc. I'm expecting to see Android in cars soon. Apple does make better hardware but it comes with restrictions

I think Android and Apple portable and touch screen devices are in their infancy and the BB text machine is over the hill. IMO RIM is the next Nortel or Corel, I would sell soon
 

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Anyone who wants a computer in their hand gets far more real capability with the iPhone.
Having used a few "not so smart" phones I would agree in general, but keep in mind that RIM has a large corporate installed base and many companies block access to their Exchange servers by all smartphones except Blackberry, primarily for security reasons. My company is one of them -- a lot of employees bought iPhones only to discover that they couldn't use them to get their corporate e-mail, or even connect to the VPN. Despite petitions and pleas to the IT department, the lockdown remains in place and they show no sign of changing their minds.

This situation could change as Apple addresses whatever perceived security and compatibility concerns that IT security officers are worried about with the iPhone (same goes for Google/Android -- we can't even use Google Docs in my company as they have it blocked for security reasons), but I still think BB is going to be popular among corporate users for quite some time to come. A lot of my coworkers carry a BB for work and an iPhone for everything else.
 

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This situation could change as Apple addresses whatever perceived security and compatibility concerns that IT security officers are worried about with the iPhone. I still think BB is going to be popular among corporate users for quite some time to come. A lot of my coworkers carry a BB for work and an iPhone for everything else.
Yes I agree the perceived security concerns will be there for a while yet. I also agree a lot of people will end up carrying 2 devices as I do, unless they made an OS that can swap from work to personal and a way to split the bill. But I'm sure they're happy selling 2 devices to everyone (consumerism/capitalism at its best)


The thing is the business market is pretty much full of BB already - many hip companies may switch to Apple/Android as time goes on. The personal market has a lot of BB as well but they stand to lose a lot here IMO. So maybe RIM won't tank for awhile but I won't put my money in them
 

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unless they made an OS that can swap from work to personal and a way to split the bill.
Actually the Nokia E71 (the phone I currently use) does this, although it doesn't provide a way to split the bill of course. You can choose work mode or personal mode, and you customize your applications set, appearances, etc. for each mode. It's a pretty cool feature.
 

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IMO RIM is the next Nortel or Corel, I would sell soon
One key difference: RIM is the industry leader in a growing market and makes very large profits. Nortel was a house of cards and Corel was going up against much larger, better capitalized competitors.
 

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One key difference: RIM is the industry leader in a growing market and makes very large profits.
"is" and "makes" are present tense, just saying. Only time will tell but I don't think RIM is any different than other Canadian tech unfortunately
 

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They have their slider model that should compete with iPhone and Droid. I think the key to their continued success will be how much they can appeal to the carriers to make money for them. AT&T is leaving exclusive status with Apple and Verfizon is signing on. But AT&T has also walked away from their cheap data plan.

I think it is a crap shoot. So I do not hold their stock. I have held Apple since it was $8. Although I sold off half of it back at $75 the first time.
 

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RIM is close to 52-week lows again and it is not often that you'll find fast-growing companies selling at a p/e of less than 15 (net of cash). I personally don't see corporate clients switching over to competing products anytime soon. Is the market focusing too much on the negatives and not enough on the compelling value proposition?

FD: I don't own RIM directly. Just curious as to your opinions.
 

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I do own RIM, and am happy to buy at these levels, but my tech allocations are all up to where they should be.

My personal opinion is that despite the growth opportunities in SE Asia and other emerging markets, investors have begun to write off the company as an aging tech company where cash flow will continue to be strong, but the explosive growth will/has subsided (sort of like Microsoft).

I've always found these transition/maturation periods rather awkward because these companies don't pay a dividend, as you point out, the market is already 'de-valuing' the stock away from traditional tech growth co. P/E's. So as an investor, these stocks can be a bit of a dead horse, they often seem best only to preserve capital (not that this is a bad thing).

I'm a little nervous about Balsille though, I'd like RIM to start paying me a 1-2% dividend, but I think they still believe they are a growth company.
 

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I'm a little nervous about Balsille though, I'd like RIM to start paying me a 1-2% dividend, but I think they still believe they are a growth company.
Don't worry they're spending that 2% on R&D for the "Black-pad"
 

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Every time the stock is down, it seems to bounce back up, way up! I have no idea on this one. I wasn't impressed by the new phone and it might be too little too late. I feel like I'm 50/50, either buy some puts or calls. lol.
 

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I hold AAPL so RIM I just more exposure to the volatility in that sector. I think the current valuation of RIM is just as insane (low) as the current valuation of AAPL (high).

The issues with the UAE et al are more severe than the Torch and Blackpad success.
 
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