To: Northern Cougar who wrote (92832 ) 4/12/2000 7:26:00 AM From: Doug Robinson Read Replies (2) | Respond to of 120523
RIMM-Here's a perspective, with great merit IMHO, regarding RIMM from yesterday's Briefing.com (another favorite). Very interesting as it provides numerous strong points that everyone should be taking into consideration before making a earnings play investment in today's market. The time the article was posted was 12:17 PM, more than enough time for people to take some actions if they agreed with the authors points. Research in Motion (RIMM) 80 -4: RIMM is yet another example of why this earnings season could prove disappointing to those investors banking on earnings to rescue the tech sector... High-flying growth stocks such as RIMM typically rally, not fall, into their numbers... RIMM is due to report results after today's close... What's more disturbing is that RIMM recently broke below trendline support amid increased activity... Is the market worried about an earnings miss? Sure looks that way... Consensus estimate calls for RIMM to earn $0.05 for the quarter and $0.15 for FY00... However, estimates have been trending lower over the past 60 days... The same is true for the FY01 estimate which has fallen from $0.48 to $0.43... Quite often (but not always), when the street lowers earnings estimates a negative surprise soon follows... And even though RIMM is trading 54% below its recent high, the stock still isn't cheap - especially if traders need to worry about the possibility of an earnings miss... At present, RIMM trades at 533x projected FY00 earnings and 66x trailing 12-mo sales... In other words, there is no room for disappointment of any kind... A designer, manufacturer and marketer of innovative wireless solutions for the mobile communications market, RIMM is in the right place at the right time... And the projected long-term growth rate of 56% suggests that the future is bright for the company... However, given the fragile nature of the tech sector, the stock's deteriorating technical tone, the downward trend in earnings estimates and still high valuation levels, the near-term risk/reward ratio is too bearish for our liking. - RW