Research In Motion Ltd (BBRY): Determining the Best Way to Play the BB10 After Earnings

Investment opportunity

Like I said, there are still too many questions, we don’t know if BB10 will convert new subscribers long-term, if the fall in subscribers will be long-lasting, nor do we know the success of Z10. Of the quarter I was most encouraged with the 370,000 tablets sold, regardless of discounting, because it could lead to relevance in the space. However, as an investment, I am still not ready to buy.

The company’s revenue was down 40% year-over-year, its total Research In Motion Ltd (NASDAQ:BBRY) shipments down 23% year-over-year, and with one million Z10s shipped, I doubt Apple Inc. (NASDAQ:AAPL) or Samsung are missing a beat. In my opinion, Apple Inc. (NASDAQ:AAPL) is still the clear choice. It is seeing 20% growth, pays a good yield, and is trading at just 7.50 times next year’s earnings minus cash. Research In Motion Ltd (NASDAQ:BBRY) is cheaper on a price/sales basis, but has more questions. The good news for BlackBerry longs is that the stock trades with a price/sales of just 0.60. Therefore, it could double in value and it would still be twice as cheap as Apple on a price/sales basis.

Conclusion

My main point in regards to Research In Motion Ltd (NASDAQ:BBRY) is that there are still a lot of questions and that an investment now is speculative. There is a misconception among investors that they have to buy right now or they will miss out on the gains. My point is that if BB10 is successful, which takes time to determine, and the stock rises 100% from this point that it is still much cheaper than the undervalued Apple, meaning more upside would exist. As a result, it might prove wise to be patient and see how the future unfolds before rushing to an investment. The bottom line: You still have time and haven’t lost out on all gains, if BB10 is a success.

The article Determining the Best Way to Play the BB10 After Earnings originally appeared on Fool.com and is written by Brian Nichols.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.