Penny Stock Detectives Warns Investors to Stay Far Away From RIM
Leading Financial Web Site Penny Stock Detectives Warns Investors to Stay Far Away From RIM
In a recent Penny Stock Detectives article, editor Sasha Cekerevac notes that technology stocks might be on top of the world one minute, but if their investment strategy is poor, they could quickly lose market share to their competitors. Cekerevac believes a great example of a poor investment strategy in the technology sector is Research In Motion (RIM), a stock that investors should avoid.
“There are several highly competitive technology stocks in the mobile phone space,” observes Cekerevac. “At one point RIM was a leading company with over 40% market share. Latest data by research firm IDC now show that RIM isn’t even one of the top five technology stocks in the mobile phone sector.”
Customers are now becoming increasingly accustomed to a faster upgrade cycle, says Cekerevac. This means that technology stocks need to be constantly improving their products, or customers will jump ship fairly quickly, he says.
“This is both a good and bad development. This pushes technology stocks to change their investment strategy from a slower pace to one that is quite fast,” argues Cekerevac. “This also benefits consumers who are on the receiving end of more products, all of which are substantially improved from the previous generation.”
The question is: now that RIM has fallen so much, is it a good buy? For several reasons, Cekerevac would say no. The most basic reason, he says, is that RIM has consistently found a way to disappoint investors. Taking a look at the recent quarterly earnings report, the disastrous data have now led to company guidance that can only be stated as poor, he claims. This increasingly gloomy market view cannot be taken lightly. In Cekerevac’s opinion, technology stocks like RIM that continue to miss targets and estimates are to be avoided, as this is a sign that management has no idea of how to run the company properly, in Cekerevac’s opinion. With results from RIM that revenue fell in the quarter by 33% from the prior quarter, it can only be said that their investment strategy is not working, believes Cekerevac.
Even worse than the latest quarter’s sales numbers is the news that RIM is delaying the launch of its new “BlackBerry” phones once again, he continues. The new operating system and BlackBerry phones won’t be on the market until the first quarter of 2013, he reports.
“Having so many months as a delay is huge for technology stocks, in which innovation occurs on a much faster scale. This is truly mind-boggling and a sign that investors should focus on other technology stocks,” warns Cekerevac.
As can be seen quite clearly, Cekerevac concludes, the trend for RIM is clearly down. There are far too many better technology stocks with a more innovative investment strategy to choose from, he says.
“Stay away unless RIM can show that it has changed the focus of its investment strategy and, more importantly, it can actually execute properly. Until that time, focus your time and money on other technology stocks,” Cekerevac advises.