In light of the massive run up on Research in Motion, (NYSE:RIMM) I have initiated a sell on 1/4 of my RIMM Position. My cost basis is $51.42. I am still long term bullish on the stock, however, I want to take a little off the table. I may not get this chance right away. Put I have my sell order just in case.
Short Term Sell, Long Term Buy
I would buy on any pullback to the low $50s. If the stock continues to soar, I will sell additional shares 1/4 more of my shares at $71.
Reason why I am selling part of my position:
The S&P report dated March 28, 2009 issued a high qualitative Risk Assessment. Here is what they had to say, “Our risk assessment reflects intense competition from larger and what we view as better-capitalized companies, RIMM’s need to
enhance its current products and develop new products to grow its BlackBerry customer base, and its dependence on carrier partners to sell new BlackBerry devices.”
So the reason I am selling is due to the High Risk Assessment.
The reason I will still hold 3/4 of my postion:
RIMM’s guidance indicated that the product sales pipeline ‘robust.’
The stock recently traded at a P/E of about 13X FY 2010 EPS projection. That’s way down from recent 30X plus levels. So there is a lot of room for PE expansion.
Lastly, I am a long term bull because of the projected above-average earnings growth of 15% over the next three years.