Why Investors Are Talking to Research in Motion
Company gets a Buy rating and the 2011 estimate keeps inching up.
Here's what I'm seeing this morning:
Research in Motion (RIMM):
Justin Sharon points out this beautiful Friday morning that Wunderlich slapped a Buy rating on the BlackBerry company.
My two cents:
1. It seems the company has been getting lots of loving lately. (Earlier this month I wrote an article after BMO Capital upped its rating.) I think these bump-ups are going to place it on a bunch of retail and institutional radar screens. If I'm right, this run up in the share price we've seen could continue.
2. That 2011 estimate keeps on inching up. You gotta love that.
3. I think the shares have a good shot of topping $80 within the next several months.
Reading this palm sure seems easy.
Give the California-based company's third-quarter numbers a look. Excluding items, it lost $0.61 a share. That wasn't so terrific because analysts had been looking for a loss of $0.42 a share.
Making matters a bit worse, it offered up a revenue outlook for the fourth quarter of under $150 million, which would be well below expectations.
1. I haven't been the biggest cheerleader for Palm, and the reason is simple: Its lackluster earnings outlook and absent catalysts on the near-term horizon never got me too excited. And not much has changed on that front. I expect the shares to take a pummeling today thanks to the quarter and the outlook. Also, if it dips under $5, which could happen today, that could add pressure to the share price.
2. I have to think that in the low single-digits, the company is going to become an acquisition target at some point. But I don't know how much leverage management/shareholders would have in any negotiations should they be approached.
3. As I've said recently, however, this stock will be on my watch list. With everyone and their sister seemingly beating up on it, I sense opportunity here at some point. Because the bar will probably be set so low now, I have to think that even a smidge of good news could send this stock substantially higher.
Energizer Holdings (ENR):
This bunny really could keep on going and going...
The battery folks were upgraded by JPMorgan to Overweight and the shares got a goose of more than two points in Thursday's session on some nice volume.
1. Batteries aren't exactly the most exciting story, but with the economy clawing back little by little, I think demand for the company's products will only increase from here. At 11.9 times this year's earnings, the stock is a good value and gives me a positive charge.
2. I think the stock could and should be challenging its 52-week highs in the short run. At the very least, I feel it would be more fairly valued in the upper $60s. Make no mistake: I'm a bull on this one.
Best Buy (BBY):
Goldman goosed its rating to Buy. (See Upgrades & Downgrades: Best Buy Is One of the Best.)
My quick take:
1. I remain excited about the "Geek Squad" folks. With what should be an increasing demand for appliances and electronics of all types in the year ahead, the company seems well-positioned to be ringing the register.
2. I have to think this upgrade is going to get people talking and get some fence-sitters involved. I wouldn't be surprised to see the shares challenging the annual highs in short order.
3. Don't forget there's a little dividend here, too.
Have a great day and an even better weekend!
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