Price Momentum Rises for Research in Motion
Founded in 1984 and based in Waterloo, Canada, RIM makes the Blackberry mobile phones and supporting software and technology, including application suites and services for the enterprise sector.
Factors to consider :
Recently the stock has an 88% Barchart technical buy signal and a Trend Spotter buy signal. The gained 9.87% in the last month and has a 57.25% relative strength index. Currently, it is above its 20-, 50- and 100-day moving average and Barchart computes a technical support level at 8.45. Recently the stock is trading at 8.56, above its 50-day moving average of 7.67.
The recent earnings release surprised a lot of analysts on Wall Street and revealed things are not as bad as predicted. Thirty five brokerage firms have assigned 47 analysts to monitor the numbers and they have revised their projections. Although revenue is expected to be down by 40.10% this year, the Jan. 30th release of the new Blackberry 10 smartphone should level out revenue next year.
The company is actually selling more phones and signing up more subscribers now. Earnings are estimated to be down 130.60% this year but cost saving measures are predicted to result in earnings to be up 55.60% next year and increase annually by a 10%-plus rate over the next five years.
The price-to-earnings ratio is 6.83% and compares favorably to the 15.2% P/E of the market The financial strength is B+ and TheStreet rates this a D+ stock.
Individual investor interest is high with 5,800 readers of Motley Fool giving the stock a 76% vote to beat the market. Wall Street analysts have four buy, 26 hold, 11 underperform and six sell recommendations in place.
Other stocks in the telecommunications industry:
American Tower has a B financial strength and is rated A- by TheStreet. Revenue is expected to be up 11.40% next year and earnings to increase by 18.28% annually for the next 5 years.
Crown Castle has a B financial strength and is rated B by TheStreet. Analysts project revenue to be up 6.50% next year and earnings to increase by 20.45% annually for the next 5 years
SBA Communications has a C++ financial strength and is rated C by TheStreet. Revenue is predicted to be up 25.10% next year and earnings to increase by 17.00% annually for the next five years.