Message Font: Serif | Sans-Serif
No. of Recommendations: 0
5 Contrarian Buy Ideas To Consider

Shares are trading at $22.65 at the time of writing, and at the low end of their 52-week trading range of $20.41 to $70.54. At the current market price, the company is capitalized at $11.79 billion. Earnings per share for the last fiscal year were $5.48. The company pays no dividend.

The company’s flagship Blackberry smartphone continues to sell well, though market share has dwindled due to competitors such as Apple (AAPL) and its iPhone. Research in Motion entered the tablet market with its PlayBook, however it is slashing prices as consumers shun it in favor of the iPad. Amazon’s (AMZN) new product, the Kindle Fire, will likely draw more potential purchasers away from the PlayBook. With all this competition, it is no surprise that Research in Motion lowered its own profit forecasts earlier this year.

Onward to the numbers. RIMM’s quarterly revenue is declining by 9.80%, Apple’s is increasing by a whopping 82%. Operating margins at RIMM are 19.48%. Compare this to Apple’s 30.43%, and Microsoft’s (MSFT) 39.31%, which indicate that RIMM has rested on its laurels too long and is in terminal decline. RIMM is due to enable NFC (near-field communications) that allow mobile payments, in place of a debit card and the archaic magnetic strip. Consumers are likely to respond positively to this safety improvement, and this may turn its fortunes around in the short-run. Perhaps Blackberry will set the trend in payment processing in the future.

At lowered forecasts of $4.80 earnings per share next year, shares have a forward price to earnings multiple of 4.71. With iconic investor and company turnaround specialist, Carl Icahn rumored to be looking at shares, the sell off looks to be well overdone.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.