BlackBerry Limited : Straight to Hell
Entry price | Target | Stop-loss | Potential |
---|
CA$9.46 |
CA$0 |
CA$10.3 |
+100% |
---|
Research In Motion, a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry solution in 1999. The BlackBerry product line includes the BlackBerry PlayBook tablet, the BlackBerry smartphone, software for businesses and accessories.
Yesterday, RIM reported its first quarterly operating loss in more than seven years in the fiscal first quarter. Since 2011, the company is struggling to survive.
From a fundamental viewpoint, even if the security seems cheap with a EV/EBITDA of 1.26x, it is too expensive because there is no growth forecasts at all. Analysts estimate a 67% revenue decrease in the three coming years. In 2014, EPS is likely to be twice less. Moreover, Analysts revised continually downward their EPS and revenues estimates.
Technically, the security is in a negative configuration as the bearish orientation of moving averages show. For a year and half, the stock has never succeeded to cross its 20-week moving average. RIM is plunging towards its CAD 7.32 support and it might not resist to the selling pressure.
Therefore, investors can take a short position immediately. The target price will be the CAD 7.3 area. To avoid important losses, a stop loss order will be fixed at CAD 10.3.
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