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Strategies & Market Trends : Fundamental Value Investing

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To: tyc:> who wrote (1816)	7/11/2012 10:11:03 PM
From: The Ox	4 Recommendations Read Replies (3) of 4719

The problem with comparing PEs, PSs or other ratios that differentiate RIMM with AAPL is that AAPL sales are growing and RIMMs are falling. AAPL sales will go up nearly 50% this year while RIMM sales will fall by 45%. AAPL will generate $45 per share while RIMM is expected to lose money this year. Companies that are losing money and have massively declining sales are not traditionally considered to be good values. Buffet looks for solid companies selling at substantial discounts to fair market as targets. Maybe a company like RIMM would be attractive at ten cents on the dollar given the current metrics but this would be unlikely since they are a technology firm. If RIMM can start to show a reversal of the declining sales trend then they may, eventually, become a value play. Losing $6 billion in sales yoy makes it very, very difficult for me to see them as a value play. Add in current expectations for losing nearly $2 per share over the next 2 fiscal years as another straw that's breaking the camel's back for this observer. Jmo Respectfully, TO

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