Why did I choose Research In Motion as my first post on this website? Well, it’s one of the biggest Canadian success stories from the last few years (I’m Canadian), I’m an investor in the company and it just announced earnings.
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The stock is down to approximately $72, sinking 10% over the last three trading days. Most of the move lower was caused by a mediocre earnings report. Actually, the earnings beat estimates and the forecast pretty much met expectations. So what really caused the move lower? Remember that RIMM had a huge beat in earnings last quarter – the stock moved up about 25% after the results were released. Research In Motion has had a great run lately and I believe many investors piled into the stock recently hoping for another earnings blowout.
Obviously, RIMM is facing stiff competition. Apple’s iPhone is the sexy consumer choice. Palm is coming out with some impressive products and even HTC/Google will soon be stealing market share. That being said, the smart phone market is expanding rapidly and Research In Motion is still the 600 pound gorilla. The company’s co-CEO Jim Balsillie said “The line-up for the next 14, 15 months is spectacular … we’ve got sector winds at our sails.”
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And I agree – RIMM should continue to see impressive revenue growth as it launches several new products over the coming year. The international smart phone market is ripe for the picking. Remember, RIMM was trading at almost $150 USD a year ago and has done nothing but continue to post impressive results. I can see this stock continuing to move higher throughout the summer and fall. In fact, I can see it reaching $125 by next spring. However, I’m a little weary of this stock in the long run (3-5 years). The mobile phone market has traditionally been plagued by profit margin erosion and although this hasn’t really shown up in RIMM’s results yet, it might in a year or two. My advice: take a serious look at Research In Motion at these lower levels. If you are or become an investor in this company, enjoy the ride, but consider taking some money (hopefully profits) off the table in the second quarter of 2010.
The Stock Guy’s Official Ranking: 9 out of 10
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#1 by Jaspersmom on June 3rd, 2010
to my knowledge RIM(Research in Motion) is a coporate doing well in wireless devices – internationally reputed corporate.
#2 by crazygidgey on June 3rd, 2010
If i was you return it to your carrier. I dont think anyone has Mikes email adress
#3 by ricky c on June 3rd, 2010
Since you have already written about the inventors and the things that they have invented, as well as the laws of physics that negate the idea of perpetual motion, there is probably only one topic that you have not discussed. You could write about the psychology of the quest for the unobtainable. What attracts people to search for ways to turn lead into gold, to live forever, to be supermen and to obtain eternal youth? You might be able to find examples of people who have spent a lot of time, money and effort on the fruitless task of trying to develop a perpetual motion machine. Crazy as such people might be, there is a positive side to their madness — they remind us of the fact that we can and ought to make machines and systems, more efficient — to get as close as is possible to perpetual motion.
#4 by quillologist on June 4th, 2010
Any product called the Dewberry and which performed email functions would result in a lawsuit from RIM for trademark infringement (they would argue that a reasonable person would assume that the the product was made by RIM).
#5 by Sadcat on June 5th, 2010
#6 by msadd3995 on June 5th, 2010
I would think that if you contacted the configeration dept of that company they would be the best help. Possibly Quality Assurance dept also.
#7 by coolguy31 on June 5th, 2010
Apple's iPhone is taking market share and now Verizon / MOT / Goggle has come out with the Droid. They are in the fickle consumer market and their product isn't as hot as it was. Remember Palm a few years back – a good company but it had its day. RIMM still has the workhorse smartphone for business but the real growth in smart phones is the consumer side – they are picking iPhones and Droids.
A company will buy a Blackberry for its sales person and pay RIMM for enterprise software to support it. But the typicial college kid or twenty something is buying some one's smart phone.
RIMM dropped over 22% in a few days after it released its quarterly results in late Sept – Here is a summary: Financial results and forecasts released by Research In Motion (RIMM) on Sept. 24 raised investor concerns
that growth for the maker of the BlackBerry may be reaching its peak.
RIM expects sales in the current quarter of $3.6 billion to $3.85 billion.
That's less than the $3.92 billion expected by analysts. In the previous quarter, sales also missed analysts' projections. RIM said fiscal second-quarter sales were $3.53 billion, a 37% increase from a year earlier but less than the $3.62 billion forecast by analysts.
That was the second straight quarter of missed financial forecasts, suggesting that RIM is under pressure from rivals.
Even as the company sells more devices than in previous periods, its average selling prices are coming down
as competitors release smartphones. In the current period, RIM expects the average selling price of a BlackBerry
to slip to $320, compared with $345 in the second quarter and $357 in the first.
They are buying back stock which should help the stock price. In August, Fortune magazine named RIM as the fastest growing company in the world with a growth of 84% in profits over three years despite the recession – however any hint that the super fast growth will decline to only fast growth will hurt the stock price. Afew days ago – Citigrowth downgraded it from a buy to a sell. Wow ! Normally a stock recommended as a buy only gets downgraded to hold not sell.