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JimVanMeerten (61.47)

Does Research in Motion still have life?

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September 15, 2011 – Comments (2) | RELATED TICKERS: BBRY

COMPLETE ARTICLE AND MORE GRAPHS

Research in Motion (RIMM) the creator of the widely popular Blackberry has fallen on some hard times lately.  At today's price it is trading at a P/E ratio of 6 in a market that is trading at a P/E ratio of 13.2.  This is a stock that in the past sold at a P/E ratio of almost 37.  The price momentum over the last 2 1/2 years on this Barchartgraph says it all:


Barchart technical indicators:

1 - 20% Barchart short term technical buy signal

2 - Trend Spotter buy signal

3 - 8 new highs and up 22.418% in the last month

4 - Above its 20 and 50 day moving average but below its 100 day moving average

5 - Relative Strength Index 54.28%

6 - Barchart computes a technical support level at 28.54

7 - Recently traded at 30.10 which is above its 50 day moving average of 27.47


Some smaller competitors that have done very well this year are Orsus Xelent technologies (ORS) up this yeat 600%, Clearfield (CLFD) up 161%, Polycom (PLCM) up 71% and Communications Systems (JCS) up 35%


Summary:  Research in Motion (RIMM) has been a high flyer for a long time.  With its great financial strength it should survive.  If the sales and earnings projections materialize and the stock returns to a more normal P/E ratio long term investors buying in at this level could see and annual return of 35% - 39% over the next 5 years.  These projections are highly speculative, as the mixed brokerage analysts opinions reflect and have a lot of variables including an economic recovery that need to happen to get that total return. Speculate a little but don't bet the farm on this one


Jim Van Meerten is a Marketocracy Master

2 Comments – Post Your Own

#1) On September 15, 2011 at 5:34 PM, Varchild2008 (85.69) wrote:

Sold off 16 cents today in a market that saw Technology and particular chip stocks soar.

Not a good sign.  RIMM has been playing catchup to Apple while Apple keeps moving forward with new innovations.

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#2) On September 16, 2011 at 9:31 AM, chopchop0 (54.29) wrote:

Ouch on that earnings report.   Sorry, but RIMM is circling the drain

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