A company that doesn’t seem to be growing, or increasing its revenues, and profits might not be a good company to invest in, right? Well that seems to be exactly what many people think of this company but if you look deeper into the fundamentals of such a company you may see healthy vitals. Maybe a name change is just the start of what’s to come for this smartphone pioneer. The ticker for Research In Motion Ltd (NASDAQ:BBRY) has already changed on both the Toronto Stock Exchange (TSX), and on the NASDAQ Global Select market to , and . The only thing left to do is get approval from shareholders at its Annual, and Special Meeting to be held in July 2013. Although BlackBerry has fallen behind in market share for the smartphone industry, I don’t think we should count them out just yet.
The numbers game
Research In Motion Ltd (NASDAQ:BBRY) always had good fundamentals throughout its existence, and it will most likely continue on this path for years to come. BlackBerry’s third-quarter financial statements illustrate that BlackBerry is exceptionally healthy, and can afford to employ new strategies, and establish new acquisitions. Both Apple Inc. (NASDAQ:AAPL), and Samsung have high market caps, with Apple leading the way at $384.19 billion, Samsung at $149.20 billion, and BlackBerry’s market cap is at a mere $5.4 billion. Research In Motion Ltd (NASDAQ:BBRY) had little to no debt last quarter with its equity at $9.46 billion, and its total current assets were at $7.1 billion– including a little over $1.5 billion in cash on hand. While both BlackBerry and Apple have little to no debt; Samsung, on the other hand, has debt totaling $11.12 billion with a debt-to-equity ratio of 9.59.
Research In Motion Ltd (NASDAQ:BBRY)’s financial strength indicates that it would not default on short-term obligations because of its high liquidity, with a Quick ratio (total current assets/total current liabilities) of 1.70 against an industry average of 0.90, and a Current ratio (total current assets – inventories/total current liabilities) of 2.10 against an industry average of 1.10. What if BlackBerry invested this money in better technology and design?
Both Apple and Samsung are a little different with positions in different markets like PCs and televisions. Apple Inc. (NASDAQ:AAPL)’s quick ratio is 1.50 against an industry average of 1.00, a current ratio of 1.80 against an industry average of 1.30, and Samsung’s current ratio is 1.89. Simply put, BlackBerry, Apple, and Samsung all have high liquidity.
On the profitability side of things Research In Motion Ltd (NASDAQ:BBRY)’s 5-year averages show future potential, with an ROA (net income/total assets) of 14.30% against an industry average of 1.30%, and an ROI (gain from investment – cost of investment/cost of investment) of 19.70% against an industry average of 2.10%, which indicates that this would be a good long-term opportunity. Apples ROA is 20.80%, and an ROI of 32.10%, which is higher than Blackberry’s ROI. While, Samsung’s ROA is 11.45%, which is lower than Research In Motion Ltd (NASDAQ:BBRY)’s ROA. Remember these are 5-year averages, so a long position is what we want to go for here. I know I would want to be on the winning side of a company’s turnaround.