Pretty simple rules based buy. Research in Motion (RIMM) should be trading above $60 using the most extraordinarily conservative projections according to discounted cash flows. It should trade around $80-90 using more realistic projections and around $110 using bullish scenarios.
$56.60 was also about 15% under my average price which usually calls for me to add more to my positions if I still feel good about them. I know there is lots of concern that Apple’s (AAPL) iPhone and the new Android competitors from Google (GOOG) such as the Motorola (MOT) Droid will hurt Research in Motion and to be honest I agree. However, I think that the concern has been overdone. Research in Motion is strongest in the business sector where the iPhone and other smart phones have irtually no traction. Corporate spending is falling now because of the recession but I would prefer to buy this fear rather than sell on it because it is temporary and only related to the recession.
The trend in mobile smart phones is strong and I believe Research in Motion will continue to capitalize on its growth.
Disclosure: Long RIMM and GOOG