Research In Motion Ltd. (RIMM) beats estimates. The market likes that. At one point the stock was up over 12% today. Not really logical, but true.
Today’s FRAT™ Videx™ looks at RIMM based on fundamentals.
Best when viewed in full youtube screen.
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For a clearer view, use FRAT™ VidEx™ (click to open in full screen)
Short-term stock prices can move quickly in either direction. Usually not logically based on fact. Consequently, they can’t be trusted. Fundamentals change slowly and are therefore more reliable long term.
Disclosure: Author Manages Portfolios Long RIMM
The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.
Tags: Research In Motion LTD, RIMM
Posted in Earnings Growth, Fundamentals, Valuation | Comments Off
Yesterday Research In Motion, Ltd. (RIMM) reported earnings. Apparently they disappointed The Street with a 35% increase in revenues and 45% increase in units sold. However, they were a little light in their forecast and the market reacted severely. As of the time of this writing, the company is down almost 15% today. And it is my opinion that it is simply not possible for a company of this stature to have its intrinsic value change by as much as 15% in a single day. The market was either wrong yesterday, or it’s wrong today. However, my main point is, and this proves it, that the market is sometimes wrong. Today’s FRAT™ Videx™ looks at RIMM for a fundamental perspective to illustrate how ludicrous today’s price drop is.
Best when viewed in full youtube screen.
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For a clearer view, use FRAT™ VidEx™ (click to open in full screen)
Disclosure: Author Manages Portfolios Long RIMM
In the long run earnings determine market price. Although companies like RIMM will be facing strong competition in the Smartphone market, the market is huge. There is ample room for all competitors to enjoy strong earnings growth over the next five years or more. Long-term investors know this, and act accordingly.
Tags: AAPL, Apple Inc., NOK, Nokia Corp., PALM, Palm Inc. New, Research in Motion Limited, RIMM
Posted in Valuation | Comments Off
During all the doom and gloom of 2008, there was one strength that I felt people were forgetting. Never underestimate the power and potential of the indomitable human spirit. So many people were focused on the past that they blinded themselves to the future. Not only have we persevered through past hardships, we become better by enduring them.
To put this into perspective, I thought it would be fun, and hopefully interesting, to look at an industry that didn’t even exist during the “Great Depression.” Smartphones. Not the ordinary cell phone, which in itself is a great symbol of human ingenuity. Instead, the Smartphone, that places the collective knowledge of mankind in the palm of our hands.
Today’s FRAT™ Videx™ will look at the investment characteristics of a few Smartphone leading suppliers.
Best when viewed in full youtube screen.
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For a clearer view, use FRAT™ VidEx™ (click to open in full screen)
Disclosure: Author Manages Portfolios Long RIMM
Perhaps there are some profitable investment choices in this industry. However, I doubt they could be as valuable as the positive aspects of humankind they are symbols for.
Tags: AAPL, Apple Inc., PALM, Palm Inc. New, Research in Motion Limited, RIMM
Posted in Earnings Growth, Fundamentals, Valuation | Comments Off
While I have enormous respect for Jim Cramer’s marketing and promotional skills, I often have strong disagreements with his buy and sell advice. I felt his recommendation to sell NII Holdings (NIHD) on his Monday show was not only wrong, but based on faulty reasoning and statistical manipulation of the facts and numbers. To be fair, I hold a generally longer term investing perspective than Cramer that will naturally put us at odds regarding stock buy or sell recommendations. Additionally, I focus more on fundamental values where investors like Cramer tend to be more price action oriented. Consequently, I believe both NII Holdings (NIHD) and America Movil, S.A.B. de C.V. (AMX) are strong long-term buys based on fundamentals.
The adage that statistics don’t lie, but statisticians are damn liars applies to my objections to selling NIHD. I felt Cramer really played with the numbers in ways that distorted the facts. He didn’t lie, but I felt he exaggerated certain facts and left out other important ones. For example, to state that NIHD is losing customers was way overblown and wrong. Cramer stated that NIHD’s churn rate increased 40% from 1.5% – 2.1%. the actual numbers are 1.8% – 2.1% which is a 20% not 40% increase. Put in a more positive light NIHD had a 97.9% customer retention rate. Considering the state of the economies in their market that’s pretty good.
I also took exception to his direct comparison to AMX. In truth, they both sell wireless in similar markets, but each has their own niche. NIHD markets to the business market and offers more feature rich communication protocols. Their recent contract with Research In Motion (RIMM) to offer BlackBerry phones is an example. Their established relationship with Motorola’s iDEN technology that provides among others, a push-to-talk functionality that appeals to business users is another differentiator for NIHD. AMX offers more basic service to the general population or retail user. There is ample room in the market for both companies.
The following FRAT™ VidEx™ shows the attractive values and opportunity for both companies based on fundamentals.
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I believe the fundamentals argue strongly that NIHD is a compelling long-term buy. There are other issues I had with Cramer’s take such as his opinion on 3G build out. NIHD already has successful 3G build out experience in Peru. NIHD has ample cash on their balance sheet and strong partners in Motorola (MOT) and Research In Motion (RIMM) interested in their success. However, the bottom line is that to advise people to sell NIHD is in our opinion an injustice. To invest in both NIHD and AMX makes a lot more sense.
Full Disclosure: Long NIHD at time of writing.
Tags: America Movil, AMX, MOT, Motorola Inc, NIHD, NII Holdings, Research In Motion LTD, RIMM
Posted in Earnings Growth, Fundamentals, Valuation | Comments Off
Research In Motion LTD (RIMM), the maker of Blackberry phones reported earnings up over 33%. Revenues and sales were above expectations during a world wide recession. Based on this great news, the stock fell almost 5%. You simply cannot trust the market, especially in the short run. Today’s FRAT™ VidEx™ looks at RIMM based on valuation.
Best when viewed in full YouTube screen.
[youtube UlxjK43SLyA]
For a clearer view, use FRAT™ VidEx™ (click to open in full screen)
RIMM was reasonably valued before it fell. Their expected future earnings growth more than justifies today’s value. No debt, great earnings and sales – the stock falls. Go figure.
Tags: Earnings Report, Research In Motion LTD, RIMM
Posted in Valuation | Comments Off