2-Star Stocks Poised to Plunge: Research In Motion? (RIMM)

2-Star Stocks Poised to Plunge: Research In Motion?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, BlackBerry maker Research In Motion (Nasdaq: RIMM ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at RIM's business and see what CAPS investors are saying about the stock right now.

RIM facts

Headquarters (Founded)	Waterloo, Canada (1984)
Market Cap	$7.2 billion
Industry	Communications equipment
Trailing-12-Month Revenue	$19.8 billion
Management	Chairman/Co-CEO James Balsillie Co-Founder/Co-CEO Michael Lazaridis
Return on Equity (Average, Past 3 Years)	34.9%
Cash/Debt	$1.3 billion / $0
Competitors	Apple (Nasdaq: AAPL ) Google (Nasdaq: GOOG ) Microsoft (Nasdaq: MSFT )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 21% of the 5,699 members who have rated RIM believe the stock will underperform the S&P 500 going forward. These bears include MajorBob04 and georcole, both of whom are ranked in the top 1% of our community.

Just last month, MajorBob04 succinctly summed up the RIM bear case: "Still not clear where the growth will come from, or even maintaining the current revenue and earnings. Based on recent problems, I expect many people to switch to other cell phones, smartphones, etc."

Over the next five years, in fact, RIM's bottom line is expected to decline 2% annually. Meanwhile, rivals Apple, Microsoft, and Google are expected to grow their earnings at a rate of 19%, 10%, and 19%, respectively.

CAPS All-Star georcole expands on the underperform argument:

Is there any valid reason to believe that I should've given it a green thumb? I cannot think of one. They are losing market share steadily with no hope of getting it back. They are such a closed system that other companies cannot use their OS. That may work for Apple, but it is no longer working for [Research In Motion]. They had a great ride, but the ride is slowing down. They may hang in there for a while, but it is going to take something really incredible to bring their stock back up in a meaningful way. Good luck [Research In Motion], but I do not think it will help.

What do you think about RIM, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Microsoft, as well as creating a bull call spread position in Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days.

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Report this Comment On December 27, 2011, at 1:02 PM, InfoThatHelp wrote:

Rim has a new strategy - aim low. Rim has figured out there are a lot of people and organizations that are firm believers that 'dumber is better', even if these people and organizations have to pay more money to be dumber. This new strategy works in two demos - the undeveloped regions and the 'inferior ones'. We all know how the 'inferior ones' have unmovable inferiority complex, these 'inferior ones' in fact believe that they don't deserve better than inferior offerings, and Rim is targeting these undeveloped regions and the 'inferior ones', as we all witness Rim's big pushes into these remote regions where there are not even networks, and the poverty stricken, jobless people whose inferiority complex are growing each and every day, give these inferior people an iPhone and they actually flinch in horror akin to giving a $1000 bill to a pauper lying low in a gutter.
In other words, Rim is promoting a low life, just like dictators who love the ignorant ones who they can bully like sheep.
Does this Rim strategy work? To a certain degree, it works, but only until when these undeveloped region know better, and when the 'inferior ones' lift up their heads, just like the wildfire freedom fighters who are rising against the oppressive Blackberry wielding dictators all over the world, totally fed up with being forced to accept unacceptable life and inferior offerings that deny them from even basic necessities that are available to the people and organizations of the free world, as Rim itself is heading into the gutters where they belong.
Rim is entering the final leg of its low life, as the Rim bulls are now flushed from their hideouts. Rimm share price will resume its decline to the low single digits in year 2012, and then become pennystock later.
Report this Comment On December 27, 2011, at 1:33 PM, KDVegas wrote:

You have hit the nail directly on the head. They are seeking refuge in third world markets that quickly are becoming aware of Android and IOS and even if black market, these beggers and impoverished have the same preference as Americas clients. Blackberry is stale. Old and we want APPLE and Google. Look for single digits shortly after the selloff temporarily props up the price, but it will burst and fall like a brick.

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	S&P 500	1,317.82	-2.86	-0.22%
	NASD	2,837.53	-1.85	-0.07%

RIMM	$11.00		+0.29	+2.71%
Research In Motion…		CAPS Rating:

MSFT	$29.06		-0.01	-0.03%
Microsoft Corp		CAPS Rating:

GOOG	$591.53		-12.13	-2.01%
Google		CAPS Rating:

AAPL	$562.29		-3.03	-0.54%
Apple		CAPS Rating:

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2-Star Stocks Poised to Plunge: Research In Motion?

Comments from our Foolish Readers

Report this Comment On December 27, 2011, at 1:02 PM, InfoThatHelp wrote:

Report this Comment On December 27, 2011, at 1:33 PM, KDVegas wrote:

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