turar Posted May 31, 2011 Share Posted May 31, 2011 Is anyone buying? Is this really getting to 6x earnings? Link to comment Share on other sites More sharing options...
Myth465 Posted May 31, 2011 Share Posted May 31, 2011 Is anyone buying? Is this really getting to 6x earnings? Nokia is also dirt cheap. Lost of things on sell, just have to know if its deep value or value trap.... Link to comment Share on other sites More sharing options...
shalab Posted June 1, 2011 Share Posted June 1, 2011 RIMM is looked as "dead man walking", given nokia's warning, it wouldnt surprise me if RIMM lowered the guidance as well. Link to comment Share on other sites More sharing options...
beerbaron Posted June 1, 2011 Share Posted June 1, 2011 40$ would bring it to 6x earnings. This is getting like a bet where the odds of winning are 2/3. FFH bough at 45$ in the last 6 months by the way. BeerBaron Link to comment Share on other sites More sharing options...
Viking Posted June 1, 2011 Author Share Posted June 1, 2011 The short term challenge for RIMM is when the new phones will be released this year (7.0 operating system... not to be confused with the QNX phones coming next year). Sounds like the new 2011 phones may have bugs that need to be fixed and they may now be delayed into Q3. Hard to see how they do not miss their annual profit forecast if the new phones are delayed. All a futher delay (= another profit warning) will do is result in more questions about leadership & management. Having said all that, the stock certainly does look cheap. One has to wonder if most of the bad news is not already out there meaning sentiment could well be at a bottom. Any OK to good news could really juice the stock price. Link to comment Share on other sites More sharing options...
Myth465 Posted June 1, 2011 Share Posted June 1, 2011 I cant handicap either one. I cant effectively handicap most of the items I am looking at. Though with HPQ, DELL, CSCO, and a few others I think there is an overreaction. I dont know if these two will be around in 5-10 years which makes it tough to make an investment. I feel better about RIMM then Nokia, but am waiting and watching on both. The others I will likely buy. Link to comment Share on other sites More sharing options...
S2S Posted June 1, 2011 Share Posted June 1, 2011 The one read-through I get from the Nokia situation (if RIMM's earlier lowering of guidance a mere 30 days after first issuance had not hit it home) is that no amount of existing brand equity could allow a company to force pricey phones with dead end operating systems that will soon be replaced (Symbian, or Blackberry OS 6.x and 7.0) down the throat of consumers. Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted June 1, 2011 Share Posted June 1, 2011 RIM hitting a new year low today. Nokia hitting a 13 year low. Link to comment Share on other sites More sharing options...
Viking Posted June 1, 2011 Author Share Posted June 1, 2011 For those interested in Nokia you may find this web site useful (the author has been pretty accurate forecasting current issues): http://communities-dominate.blogs.com/brands/ Scroll down to the April 25th Nokia market share article. Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted June 1, 2011 Share Posted June 1, 2011 For those interested in Nokia you may find this web site useful (the author has been pretty accurate forecasting current issues): http://communities-dominate.blogs.com/brands/ Scroll down to the April 25th Nokia market share article. Interesting article, confirms my suspicions that a lot of folks are making a dangerous assumption in thinking that the cellphone market of tomorrow will be like the cellphone market of previous years. Like the personal computer business in the 90's/00's, the business is becoming much more software focused rather than hardware. Link to comment Share on other sites More sharing options...
Guest VAL9000 Posted June 1, 2011 Share Posted June 1, 2011 we are dealing with technology here and I think value investors don't look at it that way. once a company falls behind competitors that Iterate faster it's over. msft apple and goog all iterate faster than rimm and are already ahead with their ecosystems. rimm is alone on an island. RIMM really needs to partner up fast. I really think they should nix the OS and adopt a third-party standard (Android or Windows) immediately. They would save so much money and they can refocus their high quality resources to problems that aren't being addressed by the likes of Google, Apple and Microsoft. Nokia did this, so RIMM will be able to watch and learn. Nokia was heading down a dead-end path with development. Excellent decision to switch, but we'll see if it was smart to choose Windows over Android (good hedge collecting a billion bucks to back a long odds horse, though). Link to comment Share on other sites More sharing options...
S2S Posted June 1, 2011 Share Posted June 1, 2011 VAL9000, RIMM has long prided itself on earning outsized margins (gross 45% vs. everyone else, ex-Apple, at <30%). Going down Nokia's path (to become just another hardware manufacturer) would mean surrendering the extremely lucrative email and BIS revenues... or effectively cut its profitability in half. Now, if management thinks a margin collapse, a likely scenario in my opinion, will happen anyway, it might be more willing to swallow the pill for the sake of long term survival / profit. Nixing the OS would also mean laying off a big part of their workforce. The subsequent populist outrage could be much worse than what we saw with Nokia. Link to comment Share on other sites More sharing options...
Guest VAL9000 Posted June 1, 2011 Share Posted June 1, 2011 RIMM has long prided itself on earning outsized margins (gross 45% vs. everyone else, ex-Apple, at <30%). Going down Nokia's path (to become just another hardware manufacturer) would mean surrendering the extremely lucrative email and BIS revenues... or effectively cut its profitability in half. Yep, but earning those margins came from being in a business where there were no real competitors. This appears to be typical industry maturation - transitioning from a world where growth is rampant and profit margins are high to one where competition eats into your margins. Enterprise email was a big part of those margins and to be clear, I'm not saying that they should give up BIS/BES. I'm saying they should shift their effort by adopting a third party operating system and offering hardware and software solutions - integrated email being one of those solutions. Someone mentioned RIM's data compression techniques for email and browsing. Why can't this be offered on an Android OS? The reality is that RIM will necessarily be shifting operating systems with BlackBerry OS 8 (or 9 or 10).. Just seems to me like the right choice would be to shift into something that actually has an ecosystem rather than having to build a whole new one from scratch. Nixing the OS would also mean laying off a big part of their workforce. The subsequent populist outrage could be much worse than what we saw with Nokia. What can you really do about this? If RIM continues to subsidize a losing operating system with a winning solution then the whole company will suffer (shareholders especially). Laying off 10% in a bid to make a better future for the remaining 90% seems like a good trade to me. At Nokia, the Elopocalypse appears sinister, but really their phone business was collapsing and they were in the weeds with OS development. They're lucky they got out when they did. Link to comment Share on other sites More sharing options...
cashisking Posted June 1, 2011 Share Posted June 1, 2011 Is anyone buying? Is this really getting to 6x earnings? the market is telling you they won't come close to earning $7.50 this year despite what their Co CEO says. Besides free cash flow is way below reported earnings here. very poor earnings quality, which the market figured out long before the sell side did. Would be great to hear more of your thinking around low earnings quality. I was looking at the financials and found some capitalization of development costs (just over $500M last FY) and a buildup of A/R (which is justifiable IMO given the huge revenue growth). Conversion of revenue into cash seemed ok to me as well. Although there was this, which is a bit of a change from the past I guess: The Company no longer expenses in-process research and development; instead it is capitalized and amortized over its estimated useful life once it is ready for use. The Company recognizes the excess of the fair value of net assets acquired over consideration paid in income. - page 22 Form 40F - Mar 29, 2011 But this seems ok to me since it development costs are an asset... I didnt see any big red flags though. Link to comment Share on other sites More sharing options...
beerbaron Posted June 1, 2011 Share Posted June 1, 2011 I don't like RIM but I just bough a 10% position today. The valuation just seemed too dam cheap at 6xEarnings. I believe there is real value on the server side and the fact that they will offer their softwares on Apple and Android makes it quite appealing. On the minus side, their business model could melt faster then the 6xEarnings could get me my money back. What people must understand tough is that it's not a bad company. They missed their deadlines and now it's being priced as if it would miss them all for the next 5 years. I also find it funny that people look at the trends for evaluating which phones are winning the race. Every company is one product away from being a market leader. BeerBaron Link to comment Share on other sites More sharing options...
Smazz Posted June 7, 2011 Share Posted June 7, 2011 So, looks like the Market is telling us Rim wont be selling another phone or Ipad ever again :o ;) Link to comment Share on other sites More sharing options...
A_Hamilton Posted June 7, 2011 Share Posted June 7, 2011 So, looks like the Market is telling us Rim wont be selling another phone or Ipad ever again :o ;) Well...RIMM doesn't sell IPad's so it isn't much of a shocker that the market doesn't give it any credit for those...also, maybe the market is just discounting 20% gross margins going forward instead of the 40% historically earned... Link to comment Share on other sites More sharing options...
beerbaron Posted June 7, 2011 Share Posted June 7, 2011 I think people are worried about the delays to their new phone. It's bit overrated, their margin will be in the 35-40% when their new phone come out. Will we see a PE of 5... who knows! BeerBaron Link to comment Share on other sites More sharing options...
Smazz Posted June 7, 2011 Share Posted June 7, 2011 So, looks like the Market is telling us Rim wont be selling another phone or Ipad ever again :o ;) Well...RIMM doesn't sell IPad's so it isn't much of a shocker that the market doesn't give it any credit for those...also, maybe the market is just discounting 20% gross margins going forward instead of the 40% historically earned... Oh crap! Haha I meant playbook - Fruedian or something ;D Link to comment Share on other sites More sharing options...
Guest VAL9000 Posted June 7, 2011 Share Posted June 7, 2011 Well...RIMM doesn't sell IPad's so it isn't much of a shocker that the market doesn't give it any credit for those...also, maybe the market is just discounting 20% gross margins going forward instead of the 40% historically earned... Oh crap! Haha I meant playbook - Fruedian or something ;D You could argue that by releasing an unfinished tablet computer, they are indeed selling iPads :) Will we see a PE of 5... who knows! Depends on how fast the E drops relative to the P, huh? Link to comment Share on other sites More sharing options...
DCG Posted June 8, 2011 Share Posted June 8, 2011 You could argue that by releasing an unfinished tablet computer, they are indeed selling iPads :) Huh? The iPad is a pretty incredibly polished product. It's not perfect, but it is is still the best tablet that has been created. Even over a year after the original release, competitors have yet to come up with a tablet on its level. Link to comment Share on other sites More sharing options...
Guest VAL9000 Posted June 8, 2011 Share Posted June 8, 2011 You could argue that by releasing an unfinished tablet computer, they are indeed selling iPads :) Huh? The iPad is a pretty incredibly polished product. It's not perfect, but it is is still the best tablet that has been created. Even over a year after the original release, competitors have yet to come up with a tablet on its level. Let me clarify my sarcasm. When RIM had no product, they could still have a good product in the works. Tablet buyers may have delayed their purchase of a tablet to stay on their preferred platform (BlackBerry). By releasing an unfinished tablet, the mystery just got sucked out of the decision. Many people who were waiting for RIM's answer to the iPad are now just buying the iPad. Hence, RIM is selling iPads :) So yeah, I agree with you, the iPad is the king of tablets (today). Link to comment Share on other sites More sharing options...
Smazz Posted June 8, 2011 Share Posted June 8, 2011 I am no Tablet Guru but from the noise on the internet (so you know it must be true ;D) there are equal pros and cons to both Playbook and I Pad. I cant help but think BB will eat into some of the old gaurds notepads revenue once they get their sh#* sorted out. Not really Apple/BB Canabalizing each other because they are (Relatively speaking) going into other Cos revenue rather than picking on their own. YEs/no? Some of these options are looking pretty good but im tryin to stay away from them if i can. Having purchased a true deriv in a while. I just dont like the time costs that have been attached. Link to comment Share on other sites More sharing options...
Smazz Posted June 14, 2011 Share Posted June 14, 2011 HELLO! :o ;) Link to comment Share on other sites More sharing options...
hyten1 Posted June 14, 2011 Share Posted June 14, 2011 i have been looking at RIMM if you say nok or rimm. I would buy rimm but if you say rimm or msft, i would buy msft for RIMM I need more of margin of safety, since i can't seem to handicap the risk, so far its in the too hard pile for me. It is temping no doubt. i also have been trying to figure out the human behavior, in terms of product switching. Sure some people will prob continue to stay with BB for the foreseeable future (what is the % of this), because its what they know, its been good to them and etc. Also RIMM's product development will they able to keep up with goog/aapl/msft all gunning for it? what will become of RIMM if and when goog/aapl/msft dominate or maybe you think rimm will be #3 or #2. what is the economics of a 2nd tier player in this space? too many unknown that i have a hard time handicapping. If the price was lower for me I would be willing to forget some of these things. But i highly doubt the price will get to what i would consider buying. Unless I see some sign or indication that some of the question i have above will be answer. Link to comment Share on other sites More sharing options...
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