As our long time followers know we have been bullish and successfully trading AAPL, RIMM and a host of other hardware / technology companies. We want to bring to your attention a few important things to consider about these two now as well as an ETF that could offer you tremendous upside in the short-term.
First lets look at RIMM which has been very much so overshadowed by AAPL in the last 12 months due to iphone and ipad growth. Case in point:
No major tech stock has gone more quickly from hero to goat than Research in Motion, maker of the Blackberry smartphone. This was possibly one of the great growth stories of the last six years (when sales grew anywhere from +35% to +127% in any given year), but Apple’s (Nasdaq: AAPL) stunning success with the iPhone and the iPad have led investors to think RIM’s days of growth are over. And they ran as fast as they could, pushing shares down from above $80 last September to below $50 in early July (before a recent rebound to $56).
We believe this creates significant value and positions RIMM as well as several other hight growth tech companies as solid value plays from where they trade now. Consider the following:
| Company (Ticker) | 5-Year Revenue Growth | July 30, 2010 Price | Market Cap (mil.) |
52-Week Price Change | 2010 Sales Growth | 2010P/E | 2011P/E |
| Canadian Solar (Nasdaq: CSIQ) | +133% | $12.28 | $508 | -9% | +90% | 12.0 | 8.0 |
| Research In Motion (Nasdaq: RIMM) |
+62% | $56.08 | $30,950 | -27% | +25% | 10.0 | 9.0 |
| Sohu.com (Nasdaq: SOHU) |
+40% | $47.22 | $1,780 | -34% | +15% | 14.0 | 11.0 |
| Synaptics (NYSE: SYNA) |
+29% | $31.18 | $1,060 | -11% | +11% | 13.0 | 12.0 |
| VASCO Data Security (Nasdaq: VDSI) |
+28% | $6.34 | $237 | -21% | +5% | 16.0 |
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For the ETF junkies there is one ETF that we believe should explode based on the smart phone war as The Street called it:
As the Droid X and iPhone 4 duke it out in the smartphone arena,Research in Motion(RIMM) plans to unleash its own product into the fray. iShares S&P North American Technology-Multimedia Networking Index Fund(IGN) is an ETF that should profit from this battle.
Needless to say there is tremendous upside in the smart phone sector;
Global sales of these phones jumped 886 percent in the second quarter from a year ago and within the U.S, Android (along with the broader smart phone industry) vastly outperformed expectations.
We expect to play these positions short-term as well as mid to long-term for the growth portion of our portfolios. Make sure to follow us on Twitter for the most up to date investment information and due diligence we find and leave a comment to tell us your pitch for these stocks. Understand and know your risk when investing.