Research in Motion (RIM)

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Research in Motion (RIM)

Post  Max on Fri Jun 17, 2011 11:15 am

Even at $2 EPS, this is a 7.5% annual return ($2 EPS / $27 stock price). The low end of their revised forecast was around $5.75.

They are currently close to 2 x book value (I used a conservative book value of about $14, but official numbers are closer to $17).

The bad news? We have to wait until 2012 to find out if their new product line is any good, and they are facing increasing competition that should permanently squeeze margins. OK, but... it will not happen overnight. Still many good earning years in RIM yet.

What am I missing here?

P.S. I just bought some this morning.

Max
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Re: Research in Motion (RIM)

Post  Max on Fri Jun 24, 2011 8:45 am

Sold around $29 for a nice 8% gain over 1 week. Immediately regretting it as I think it will go mch higher, but I really don't know the competitive environment that well, so I am giving myself a very large margin of safety.

I will start buying back in at $27 if I get a chance.

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Re: Research in Motion (RIM)

Post  Max on Thu Jul 21, 2011 9:47 am

Started buying back in at $27 as planned, and averaging down along the way to the recent low of $24.

I think it is undervalued to the point where it might not matter if they make any profit at all, but they are still returning in the worst estimates somewhere around 5-10% annual return on current stock price. Any good news (board of directors shake up, new product, split of company, etc will result in big short term gain I think.)

Investor sentiment is as negative as it gets, since most analysts and consumers think they will be bankrupt in a year, and it is heavily shorted. When the sentiment turns, the stock price will change quickly.

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Re: Research in Motion (RIM)

Post  Max on Mon Aug 15, 2011 11:02 pm

Anybody interested in this one yet? I am back in the money on it, and it is finally looking like the market has accepted that good news is possible and that this stock is undervalued.

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Re: Research in Motion (RIM)

Post  Max on Thu Aug 25, 2011 10:01 am

Sold at just under price target of $29 today for 10% gain over past 3 months. News that Steve Jobs left Apple (for health reasons) is causing a small spike in competitors. I will buy back in if it goes back down around $27 again.

Quite possible it can do $40, but not sure how long that will take and that relies on waiting around for the results of their new products (more risk). Trying not to be greedy this time.

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Re: Research in Motion (RIM)

Post  Max on Fri Sep 16, 2011 9:42 am

Back in this morning at $23!

At this price, it is just ridiculous. At $2 annual EPS, it still works out to an 8% return. Even with the drop in sales, they are still expecting $5 er share this year. Add that to the book value, which is near $15-20 (or more if you include intangibles), and there is no reason for the stock to be this low. Any lower, and they get bought out.

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Re: Research in Motion (RIM)

Post  lukera on Thu Sep 22, 2011 3:58 pm

So $18/sh book value and $5 EPS/Sh = $23/sh valuation. how is it possible that the stock can go below this?

Based strictly on market sentiment a company can be valued lower than what it is actually worth?
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Re: Research in Motion (RIM)

Post  Max on Thu Sep 22, 2011 10:06 pm

Short answer yes. Even without solid reason, market could just be irrationally panicked.

It is valued lower than I think it is worth. All analysts seem to be factoring in continuous losses for years to come, which would drag down the book value over time.

Question to answer before investing is whether it is possible to go from where they are now to losses. Otherwise, any profits at all, and the current stock price is well-justified.

Basically there are lots of things that can go wrong, but the current stock price assumes those things have already happened. All it takes is a couple of things to go right (and there are lots of opportunities out there for something to go right with RIM), and the stock price valuation will start considering future profits instead of losses, and that will make the stock price jump quickly.

Good sign that today, with the entire stock market down 4%, and this one of the most hated listings on the stock market, it still managed to gain a few cents. Definitely appears to have bottomed.

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Re: Research in Motion (RIM)

Post  Max on Wed Sep 28, 2011 12:24 am

Carl Ichan coming aboard RIM? Not even sure this is good news for RIM, but should form a catalyst for the market to see the possibility of a turnaround.

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Re: Research in Motion (RIM)

Post  Max on Thu Oct 06, 2011 9:03 am

Lots of good new out there all of a sudden for RIM. I am up nicely and still waiting.

The conspiracy theory was that they angered some of the carriers by introducing their tablet that links to the phone so that you don't have to pay separate fees for each device. So the carriers put considerable effort into trashing the company in the media.

Anyway, the playbook is sold out in Canada apparently. New phones are selling as well, and the new operating system will soon be unveiled along with access to android apps.

Things are looking very up.

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Re: Research in Motion (RIM)

Post  lukera on Thu Nov 10, 2011 11:53 am

WTF is happening here? short sellers?

Toronto post says RIM going below $10. What would be a buy in strategy here? the fundamentals are good, really good at this point, no?

Wait for an uptrend and then buy in or average your way down?
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Re: Research in Motion (RIM)

Post  Max on Thu Nov 10, 2011 9:57 pm

I'm lost here. Its so far below what I thought would be possible. I keep buying more. At this price, all kinds of minor good news could case a relatively large boost in stock price, and there is not much left to drive it lower. Unless they go bankrupt in a year or two, I think it will be back to reasonable price in time.

I think the recent article from Steve Jobs trashing Flash (supposedly one of the Key advantages of the Blackberry) was a part of the current leg down in the stock price.

Right now, just waiting for next financials to get people rationally focused again when they see that RIM is still making huge profits even if they are much less than they once were.

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Re: Research in Motion (RIM)

Post  lukera on Thu Dec 15, 2011 12:49 pm

QE due out this afternoon. Fundamentaly RIM should see a pop as they are so undervalued right now.

But by the looks of it, even analysts are foregoing using a fundamental analysis on RIM.

Personally i think it will move up after the QE is released purely due to the fact that i have been trigger shy on buying. Very Happy
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Re: Research in Motion (RIM)

Post  Max on Sat Dec 17, 2011 12:58 am

OK, bought 400 more at $14 this morning. Avg price is still around $19. Don't know what to say at this point that hasn't been said before, but I think it is way oversold.

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Re: Research in Motion (RIM)

Post  lukera on Wed Dec 21, 2011 3:03 pm

$14 may have been a good buy! Buyout speculation starting from what i read.
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Re: Research in Motion (RIM)

Post  lukera on Sun Jan 22, 2012 11:57 pm

Not that you didn't already know but this just came across my computer:

BlackBerry maker CEOs step down as pressure mounts

Well they were looking for someone to blame and it looks like they found two people.

I suspect this will bode well for RIM on the market tomorrow!
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Re: Research in Motion (RIM)

Post  Max on Tue Jan 24, 2012 10:10 am

Hard to say how the market will react. I was kind of hoping that analysts were over-reacting all along, and there was still lots of chances for a turnaround. Now that the CEOs themselves have lost faith, I am worried. I never thought it was a good idea for a change in management. Sure, they have been pretty lazy and let the market pass them by, but once they got back into a competitive mindset, I think they were the best guys to lead the company out of the slump.

Now, we don't know what to expect, and the company is likely to be tugged in a number of different directions trying to please different analysts. I want to see a leadership that says "to hell with short term analyst opinions. We have a vision and a strategy and will follow it regardless of short term stock performance." (and then elaborate on what their strategy is, of course).

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