The Case For and Against Research In Motion

Do you know the risks associated with your stocks?

Stocks come with a good amount of uncertainty. If they didn’t, then we would all have matching portfolios, happily invested in all the same stocks. But of course, the potential returns would be close to nil in that case, so differing opinions are a key factor of our financial system.

If you ask two members of our CAPS community about the same company, chances are you’ll get two different opinions. Among any group of members, some will say it’s the best; others will disagree. Each opinion has its merits, so taking the time to see both sides of a story will help you become a better investor.

With that in mind, we’ve gathered myriad investing insights from our CAPS community, where 110,000-plus CAPS members have contributed picks and commentary for more than 5,500 companies. Today we’ll look at some of the bull and bear cases for the company that gave rise to “BlackBerry thumb”: Research In Motion (Nasdaq: RIMM  ) .

Research In Motion

 

CAPS rating (out of 5)

**

Market cap

$71.9 Billion

1-month return

10%

Source: Motley Fool CAPS, as of Aug. 8.

The bull case for Research In Motion
From MichaelinWA:

I want to be able to say it's overpriced, but when I look at the growth, earnings, and margins....and then paint some fairly austere scenarios about future growth and p/e it still looks ok for value. If the product really tanks, and it will certainly have more competition going forward, then of course the stock is dead. I'm gonna say the company will be able to compete.

Ficus55:

Even with Apple (Nasdaq: AAPL  ) as a major competitor, the PDA world has nowhere near reached market saturation-leaving plenty of people to purchase new Blackberrys.

CAPS members bullish on RIMM are also bullish on:

  • Google (Nasdaq: GOOG  )
  • Cisco Systems (Nasdaq: CSCO  )
  • Potash Corp of Saskatchewan

The bear case for Research In Motion
MikeDubs

The mobile devices market is maturing and the Blackberry handheld is now one of many platforms available with phone and email capability. AT&T (NYSE: T  ) (Apple) and Verizon (NYSE: VZ  ) have nice looking and fully functional mobile business devices.

geekdiver

Compare market caps of this stock and Nokia (NYSE: NOK  ) , then compare penetration. Nokia has 10x the penetration but RIMM is within 10% of [Nokia's] market cap. Yeah, pull the other one guys ... What's worse, with their tiny penetration into the handset market any significant inroads by competitors (cough-apple-cough) could really hurt these guys.

CAPS members bearish on RIMM are also bullish on:

  • Amazon.com
  • First Solar
  • General Motors

What’s your opinion of Research In Motion? Do you side with the bulls or the bears on this one? Dial in your projections on CAPS -- it won’t cost you a penny -- or add your thoughts in the comment box below.

Apple and Amazon.com are Stock Advisor recommendations. Google is a Rule Breakers recommendation.

Fool sector editor Katrina Chan does own shares of Apple, but does not own any shares of the other companies mentioned. The Motley Fool has a disclosure policy that’s only a phone call away.


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  • Report this Comment On August 08, 2008, at 6:37 PM, spirity wrote:

    I'm Bullish on RIM. So many negative reports on RIM. Yet Apple can't compare with the Blackberry's first generation.. now with Bold out.. what have Apple got to compare? it's iphone has glaring gliitches... yet it's always a downer for RIM. I always wonder if RIM was an american company instead of canadian..............

    Spirity

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