Tag: stock

Should BlackBerry Go Private? Recent R&D Layoffs Suggest It Might Be Time

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Recently, BlackBerry laid off 250 employees, some of which were located in the Research and Development department of the company. During a phase of the company when they should probably be investing more dollars in R&D in order to come up with the next generation of consumer electronics, the company is scaling back. One reason the company may be scaling back is a consequence of being a publicly traded corporation. Public companies are often at the behest of Wall Street to meet quarterly earnings expectations and this short term focus can reduce prioritization of longer-term departments such as R&D. Does this mean being a publicly traded corporation is not in BlackBerry’s best interests?
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Free Fantasy Day Trader App is Equity Entertainment

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Fantasy Day Trader is an app by JAK Enterprises that puts you in the position of a pro trader. With all the features of a live trading app, it has live quotes from more than 175 exchanges, commodities, currencies, indexes and mutual funds.
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QFolio Free NASDAQ Portfolio Manager For BlackBerry Playbook

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QFolio NASDAQ OMX Portfolio Manager is a free Playbook app that helps visualize a stock’s performance and gives valuable data about a stock’s performance. With unlimited real-time quotes, expert charting and an exclusive heat map, QFolio is an ideal app for anyone who’s into the tech equity markets.
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Macquarie Equities Research Gives RIM an Outperform Rating and US$40 Share Price Target

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Macquarie

Analysts for the most part have been parroting each other lately when it comes to RIM and its share price. At least one group, Macquarie Equities Research, isn’t listening to the hype and is giving RIM an Outperform rating and a US$40 per share price target. Kevin Smithen, senior telecom services analyst with Macquarie, believes that while RIM may be seeing some decline in US markets, it is far better positioned internationally than other brands. According to Smithen, international markets are reluctant to adopt the iPhone or Android devices due to fears of their high-margin text messaging revenue being cannibalized. Lower subsidies for carriers in emerging markets also make for higher margins for RIM on each BlackBerry sold.

RIM is doing very well in international markets with a 50% market share in Indonesia where 5.5 million subscribers have actually generated sales of approximately 10 million units. RIM sales in the Asia-Pacific region have nearly doubled in the last year, growing to 1.61 million units in the first three months of 2011 from 817,000 units during the same period last year.

It’s interesting to note that whenever somebody claims “RIM is dead” they won’t touch on some very basic points such as 1) international growth 2) security and 3) the potential roadmap with QNX. These are major advantages for RIM that doesn’t jive with the lazy, half-assed blogging from C-list individuals.

RIM’s is Financially Sound and Earnings Are Very Attractive

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RIM corporate

There are a lot of websites claiming RIM is dead and the BlackBerry is out. This isn’t the case when you look at the future device and OS roadmap and it’s especially not true when you look at the company’s financials. iStockAnalyst did a good breakdown of some key metrics. Highlights include:

  • For companies such as RIMM that maintain significant inventories, inventory to sales ratio is a key performance indicator. Inventory to sales for RIMM was 4.41 percent last year, while for this year it is 3.10 percent. Since inventory to sales has decreased from last year by -1.31 percent, RIMM’s inventory management seems to be good.
  • RIMM’s sales of $20.6 billion, based on trailing 12 month sales is higher than the sales for the year ended February 2011, which means demand for the company’s products is increasing (I think this is valid even when we consider price inflation). RIMM’s current ratio of 2.04 indicates that the company is managing its operations conservatively.
  • The long-term debt for RIMM is $0.0 million, while the net current assets are $4.1 billion, this indicates that the company’s financial position is very sound.
  • Currently, the company’s P/E of 4.11 relative to the growth rate of 51.23 percent, based on the average of the three, four and five year historical EPS growth rates, is very attractive.

Read more at “Should You Invest in Research in Motion” at iStockAnalyst.

Layoffs at RIM? Great, Fresh Blood is Good

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The newswire is abuzz about recent firings or layoffs at RIM and generally giving the tired same response of “another nail in the coffin for RIM.” The truth of the matter is that it’s probably not that people considering the giant size of RIM globally, and in the end it’s for the best. Fresh blood will bring fresh ideas to the company and challenge the status quo. Rather than see this as the demise of the company, it should be seen as a positive move for the company to cycle out some underperforming fodder for some real innovative staff.

Generally, the company has lost its evangelists. Every single news source loves to put a negative spin on the news. For example: RIM is supporting other smartphone platforms on BES. Rather than understand that companies on BES are seeing a smattering of other devices on the network and a few iPhones isn’t a corporate takeover, media likes to say it’s the end of RIM. Hopefully these layoffs are happening in the marketing department because they’re clearly not doing a good job of convincing the tech writers and bloggers of the world.

The media is a real herd mentality these days. Maybe it always was.

UPDATE: Again, the media just keep repeating the same line over and over. When the VP of Digital Marketing, Brian Wallace, announced he was leaving for Samsung, somehow this got translated into bad news for RIM. The real story is that Brian Wallace has been working at RIM for 11 years. Any company that’s going to transform for a fast-paced and changing market should be happy if 11 year old employees are leaving. It will make room for new blood that can invigorate the company.