Research In Motion Ltd.
Wednesday’s close: $13.49, up 2 cents
52-week trading range: $6.10 - $18.24 a share
Annual dividend: none
Analysts’ ratings: There were 6 buys, 25 holds and 16 sells, according to Bloomberg data. Target prices ranged from $4.92 to $16.80 a share.
Recent history: Shares of the BlackBerry smart phone maker went into freefall earlier this year amid fierce competition from the Apple iPhone and Google Android phones. After tumbling nearly 60 per cent this year, the stock has since rebounded in the fall and more than doubled. The recent rally has shaved RIM’s loss to just 9 per cent this year. Recent optimism comes amid wide debate as to whether the Jan. 30th launch of the touchscreen, BlackBerry 10 can turn around the fortunes of the former high-tech darling. In 2008, RIM’s shares topped $150 a share.
Outlook: RIM will be in the spotlight on Thursday as it releases third-quarter results after the closing bell. Its shares have climbed recently despite consensus analysts’ expectations of revenue falling 49 per cent to $2.65-billion, and a loss of 35 cents a share. “The quarter is not as important as whether it will be successful with the BlackBerry 10,” said Jim Huang, president of T.I.P. Wealth Management Inc., which owns the stock. “The previews of the product have been quite favourable so that gives RIM a chance. That is what is exciting for investors.”
As the stock sank to the $6-level this year, and global market share fell below 5 per cent, “the company was given up for dead,” Mr. Huang said. “The competition has been getting tougher, and has executed better than RIM in terms of product attractiveness and, more importantly, their availability of apps. RIM’s strength was in dealing with the IT departments of corporations and telecom carriers...but they are not nearly as important as making sure end-users are happy.”
A key third-quarter number to watch is the direction of RIM’s subscriber base. He expects that number to be flat as it continues to grow in some emerging markets even though it is losing share in the United States. “Also, the cash position will be important, he said. “They need to conserve their $2-billion in cash for the launch of BlackBerry 10.”
He is betting on a turnaround because he figures the BlackBerry 10’s new operating system will be on par with rivals, and that telecom carriers and even consumers want to see competitors for Apple and Android to avoid control by a big duopoly. If the new BlackBerry helps it to become the No. 3 player globally with a market share of 15 to 20 per cent, its stock could go “substantially higher,” he said. “If the BlackBerry 10 is successful, this will be a $30-stock in one to two years.” If the new phone is not successful, the stock probably has a value in the $5-to $7-range, he said. “They do have patents, and still have a good enterprise business, which will sustain for a reasonably long period of time. It [RIM stock] will not go to zero right way.”