With shares of Research In Motion (NASDAQ:RIMM) trading at around $11.10, is RIMM a Buy, a Wait and See, or a Stay Away? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
It wasn’t long ago when everyone seemed to own a Blackberry, which was also known as the Crackberry. This term relates to crack cocaine and its highly addictive nature. However, it looks like the “Crack is Whack” campaign has begun in regards to the Crackberry, and this campaign has been highly effective.
Over the past year, this stock has gone from a high of $18.77 down to $6.22 and then back up to $11.10. Owning a stock like this will drive any investor insane. The primary reason for the recent optimism is the Blackberry 10. Unfortunately, investors are being overly optimistic.
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Those who are into technology might love the Blackberry 10 since it will run on QNX. This means fast load times, private security, and many more features that techies will love. The problem is that the target market shouldn’t be techies. What many companies don’t seem to realize is that while technology is important, it’s not nearly as important as marketing. A product simply needs to seem cool to tens of millions of people, if not more, in order to dominate the market. It’s highly unlikely that Research In Motion will successfully market this product and steal considerable market share from the iPhone and Android.
E = Debt to Equity Ratio is Strong
On the other hand…