As Research In Motion falls out of favor with many investors with shares hitting an 8-year low, one “Fast Money” analyst maintained a hold rating on the stock.
So why not sell?
“The only reason is the stock is now at a point where it is trading at tangible book value,” Morgan Keegan analst Tavis McCourt said Friday. “There’s probably too much risk in getting too negative on the stock here. It wouldn’t take much to make it pop on the strategic front. I don’t want to sugarcoat it; operationally, things are pretty bad right now.”
RIM stock fell 11 percent in trading on Friday to close at $13.44.
A significant change in strategy would likely be needed to turn things around for the company, McCourt said. Such changes could include retrenching and serving a niche market instead of trying to be a global handset provider.
But no such plans were in the works, he noted.
McCourt lowered fiscal year 2013 EPS estimates to $2.96 from $3.35, with a price target of $17 per share.
“You’ve got a couple of more quarters, at least, where earnings wil continue to go down,” he said. “They’re still going to make money. This is not a company that all of a sudden is going to start losing money anytime soon.”
On the upside, RIM has advantages outside the United States, McCourt said.
“Until some kind of strategic decision is made, it’s really hard to take a flyer here,” he added.
McCourt likened it to his recent upgrade of Motorola.
“You knew Motorola, when they were ran into trouble and they couldn’t scale the business, you knew you had a very rational and unemotional CEO and lead investor who would look at options,” he said. “We don’t have that right now at RIM.”
- Is the BlackBerry 10 Delay a ‘Death Knell’ for RIM?
- Pros Trade Research In Motion Earnings
- Slideshow: 10 Top Stocks for the Long-Term Investor
Got something to to say? Send us an e-mail at firstname.lastname@example.org and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to email@example.com.
Trader disclosure: On Dec. 16, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns D; Grasso owns LIT; Grasso owns MH; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU; Kinahan is long C; Kinahan is long MSFT and short calls; Kinahan has INTC short puts; Kinahan is long YHOO;
For Greg Salvaggio
For Kena Sena
YAHOO (YHOO): Evercore or an affiliate expects to receive or intends to seek compensation for investment banking services from this subject company
For Toni Sacconaghi
Bernstein currently makes a market in the following companies AAPL / Apple Inc
For Tavis Mccourt
McCourt is long GLD
McCourt is long GOLDCORP
McCourt is long ELDORADO
McCourt is long BARRICK
For Jeff Kilburg
Kilburg is long 10 year treasuries
Kilburg is long 30 year treasuries