Canadian Money Forum banner

BlackBerry (BB.TO, BBRY), previously Research in Motion, Ltd. (RIM.TO, RIMM)

185K views 734 replies 144 participants last post by  Addy 
#1 ·
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?
 
#2 ·
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...
 
#3 ·
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.
 
#7 ·
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.
 
#4 ·
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.
 
#8 · (Edited)
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
 
#14 ·
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.
 
#15 ·
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.
 
#16 ·
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.
 
#20 ·
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.
 
#21 · (Edited)
This article describes my thoughts to a tee

the people we know who buy BlackBerries buy them because they're cheap, or because their company buys them, or because they still think they need a plastic keyboard.
everything about it feels half-baked and the opposite of smooth
Rim is the new Palm

And comon.. the Blackpad a year later? Exactly like Palm trying to copy the iPhone after it's too late
 
#22 ·
This article describes my thoughts to a tee





Rim is the new Palm

And comon.. the Blackpad a year later? Exactly like Palm trying to copy the iPhone after it's too late
The media always takes the consumer angle on companies that are primarily business customer focused.

Companies buy Blackberry products because of easy and secure integration with Outlook and the level of control they are able to have over the devices. This is why they are so successfull.

While we look at the "Blackpad" as a iPad rival, these devices will again likely be designed as business class devices with integration into an enterprise's infrastructure.

That said, RIM's primary problem IMO is trying to build devices (phones and tablets) that would satisfy its corporate user base and also appeal to the consumer looking for an experience similar to iPhone or Android. This is the gap they are having difficulty overcoming. They could very well end up like palm but we have not seen a serious attempt by someone else to crack the enterprise market and until that happens, they are a viable.
 
#23 ·
Growth is looking pretty slim though. Others have closed the gap on the integration with Outlook afaik, but I agree I do like my BB for that. Still there are companies switching to Android and Apple

During last year's November quarter -- the last time RIM revealed this stat -- non-enterprise customers represented more than 80% of its new subscribers. Sure, RIM will continue to have its enterprise customers -- those who don't leave for Apple or Android -- but the consumer market is where the growth is.
 
#25 · (Edited)
So your saying the downside is that "it'll drop quite a bit" yet your upside is only 16% from your pickup price? doesn't sound like a safe bet to me

A nice way of valuing RIM would be to just value their NPV of their future cash flows for their enterprise operations only and buy at a discount to that value and assume you'll get the rest such as the blackpad and consumer products for free.. that'd be the ideal margin of safety imo.. i'd use this method in valuing pharma companies as well with their patents
 
#26 ·
RIM is on my watch list, but be careful. There is more negative buzz around RIM than positive vibes, and if they are shut down or restricted in India or anywhere else the bottom could fall out.
Here are the latest analyst views off another investment site, and they are rather mixed.

DON'T BUY 49.450 Paul Harris, CFA Very cheap at almost 8X next year's earnings. Make lots of money and lots of free cash flow. Product selling price continues to go down. Was a great enterprise company but didn't make a great product for retail. 2010-08-26

HOLD 52.480 Bill Carrigan Chart indicates a double bottom. Historically it is quite far below the 200-day moving average indicating it is drastically oversold. Don't let it go below $45. 2010-08-19

TOP PICK 51.900 Brian Acker, CA Model price of $69.35, a 35% upside. Fits his measurement as a value stock. He would try to average in on a systematic basis since it is on a down slope. Could potentially go down to $44 level. 2010-08-17

DON'T BUY 51.900 Benj Gallander An interesting company but he would not buy it even at this price. In a very competitive sphere. Have to be weary of companies without a lot of products. But he can see why people like it. 2010-08-17

STRONG BUY 53.020 Jamie Horvat Continues to like this name and the growth in the smart phone market globally. Their share globally has been about 30% with the rest of the growth being in North America. Thinks they can work with governments regarding security issues. 2010-08-16

WATCH 56.440 Peter Brieger Owns and is seriously considering average in down but a couple of things have to happen but at 10X this year's earnings and about 9X next year's a lot of the problems have been discounted. Try to buy at $50.
 
#36 · (Edited)
They bought QNX for a drop-in-the-bucket $200 million. Their biggest expense is still sales and marketing. RIM's market cap is reduced to $19 billion in June 2011 from $83 billion in June 2008. People just don't like their products anymore. Nokia is in the same shoes (2007 $150 billion -> 2011 $23.90 billion) but I think has a little more hope with their MSFT deal.

In other news, NHL Commissioner Gary Bettman has told Jim Balsillie that if he "behaves himself and doesn't create any more spectacles and bad publicity for the league", he will eventually get a team.
 
#48 ·
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top