Strong Buy?According to the last conf call, the last share buyback was completed. They cannot buy back any shares till August.
RIM has dropped more than I thought possible. The valuation at this price seems incredibly low.
1) For the current year, RIM projects earnings of $7.50 per share. Even if they only achieve 66% of that target ($5/sh)
the forward PE is $42/$5 = 8.4 ???
2) The balance sheet is pristine, zero debt and ~2 billion in cash
3) They have a current install base of +60 million blackberries and 250,000 blackberry servers. Having installed server infrastructure is a significant barrier to entry for competitors, and as far as I know, there's no such thing as an Apple mail server. Having +60 million device install base will also imply guaranteed replacement/upgrade sales.
4) Industry leading security, seems to insure that the core user base of business, government and even componetns of the consumer market should be reasonable safe.
5) New and improved products in the pipeline, QNX blackberrys, new touch screen blackberries, new playbook models, porting of android apps, development of new apps will help drive future sales.
6) Continuing expansion of the smartphone market itself will allow all smartphone manufacturers to grow their sales.
Although there is execution risk in the development of new products, RIM spends huge coin on RD and has a strong history of great product quality. At 42 bucks, RIM is probably even on Warren Buffet's watch list.
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