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Research in Motion: Answering the upside call
Guest blogger: Larry Schutts, vice president of Stockwinners.com and a contributing editor for Theflyonthewall.com. Larry looks for stocks with technical and fundamental characteristics indicating gains in the next 30 days. However, price movements may be volatile. He includes a stop-loss price in each post. Consider selling a position should the stop-loss be violated. Look for more of Larry's stock picks in the days and weeks to come.Research In Motion (NASDAQ:RIMM) is a leading provider of wireless communications hardware, software and services. Company devices allow access to email, telephone, messaging, internet and intranet-based applications. RIM products include the BlackBerry wireless platform and the RIM Wireless Handheld product line. The firm also provides software development tools and makes radio-based modems that other manufacturers incorporate into their portable devices. Competitors include Microsoft (NASDAQ:MSFT), Motorola (NYSE:MOT) and Nokia (NYSE:NOK).
RIM surprised the Street last week, when it reported Q3 EPS of 65 cents and revenues of $1.67 billion. Analysts had been
looking for 62 cents and $1.65 billion. Management also guided Q4 EPS
to 66-70 cents (65 cent consensus) and Q4 revenues to $1.80-$1.87
billion ($1.75B consensus). In discussing the solid numbers, the firm
noted strong adoption in Europe and improving performance in several
emerging markets. Bear Stearns subsequently upgraded RIMM shares to
"outperform." JMP Securities and UBS reiterated calls at the same
level. RIMM shares popped on the news and then moved into a bullish
"flag" consolidation pattern. Prices frequently exit flags moving in
the same direction they were traveling on entry. In this case, that
would be to the upside.
Brokers recommend the issue with seven "strong buys," 16 "buys," 11 "holds" and two "sells." Analysts see a 52% growth rate through the next year. The RIMM Sales Growth rate (21.88%), EPS Growth rate (103.23%), Operating Margin (27.83%), Net Profit Margin (21.13%), Return on Assets (28.58%), Return on Investment (36.21%), Return on Equity (36.95%) and Net Income per Employee ($170.89k) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 71% of the outstanding shares. The stock is one of those used to calculate the Nasdaq 100 Index and the AMEX Internet Index. Over the past 52 weeks, it has traded between $39.92 and $137.01. A stop-loss of $99.50 looks good here.
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there is a rumor that
is there any bases to the rumor that AT&T IS MAKING A OFFER TO BUY RIMM
at7t
9/21/08 12:47 AM