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Strategies & Market Trends : Value Investing

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From: Walter Bagehot	10/12/2010 7:30:46 PM
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RIM as a value stock: - ROE 42%, and average over 5 years extremely high - ROA 30% - Cash - $2bn+ - No debt - Earnings power is immense, and representing value before thinking about growth - even if you don't believe it will become anything like a Microsoft, the fact that companies are locked into BBerry server integrations is significant - I don't care much about the retail side of the BBerry, but that is huge as well due to free SMS through BBerry server - 5yr growth rates are solid Basically it seems to be a true hidden eagle of Buffett style (if he invested in tech), where the market views it as a Motorola one-trick-wonder, with nowhere else to go. I don't care for the growth story, but that is a great upside considering we are only at 9.0x PE. Would be wonderful if it happens, but the existing business protects my downside well at the moment. I disagree - the integration into real businesses is huge and makes BBerries almost a necessity for business. I don't rate the iPhone as a business tool compared to the BBerry, as integration is nowhere near what RIM achieve. A typical failed equity story with hugely growing earnings power, and a lower PE even if it grew nowhere from today. Bought at $49.55 (CAD:TSE)

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