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Rally lifts stinkers, but not RIM Add to ...

Some of the most beaten-up stocks are seeing the biggest gains in Monday’s broad rally, putting the “risk” into the “risk-on” trade. Netflix Inc., which slumped 77 per cent from its high in July amid management stumbles and concerns about next year’s earnings, bounced 8.5 per cent on Monday; First Solar Inc., down 77 per cent since February, jumped 9.2 per cent.

Amid this no-stock-is-too-ugly buying spree, Research In Motion Ltd. stands out: The shares rose a mere 0.1 per cent in Toronto (they did better in New York, due to the slumping Canadian dollar), and that was with the help of a bullish report from Gus Papageorgiou at Scotia Capital. He reiterated an “outperform” recommendation on the stock, arguing that it is “absurdly oversold” given the company’s high profitability and a “refreshed and higher-margin device portfolio.”

Then again, RIM also had to contend with a downgrade, this one from Shaw Wu of Sterne Agee: “Looking in retrospect, we should have downgraded in mid-October when the stock was $24 (U.S.) and our supply chain checks indicated that while its new flagship BlackBerry Bold 9900 was doing decently, the rest of its product line was lagging. We had trimmed estimates below consensus due to this. Since then, estimates have come down a bit but we believe will likely need to be reduced further.”

So there you go: The battle of the analysts, never for the squeamish, gets more heated on this stock. Meanwhile, investors can look forward to the company’s third-quarter earnings report, due on Dec. 15, for an indication of who’s right – for now.

Follow on Twitter: @dberman_ROB



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