This is for the Canadian investor to view as we tend to have some Portfolio Managers up here who are way off base at times.
Mr. D. Stewart (Portfolio Manager of the "Navigator Canadian Technology Fund"): You have been down on this stock from the get go, I remember you saying a while back, on CITY TV, that RIM should be trading no more than C$10-C$20 (kind of a wide range, don't you think - real safe target on your part) when it was trading at C$26. Then yesterday evening, on the Canadian "NewsWorld Business News" when asked what you are selling (I don't believe you ever owned RIM shares, or if you did you got caught selling too early) you stated:
"I have never in my life encountered a device company, which essentially is what Research In Motion is, trading at these kinds of lofty price to sales multiples(P/S). This device company is trading 20X well over next years revenues. (so you know what next years revenues are?) I've never seen a company be able to sustain that value. Good company but I can't take that price." True you praised every inch of the company right to the strong core of management, but you really went off the deep end on that concluding statement.
First RIM is not just a device manufacturing company. You have some homework to do when it comes to how technology stocks trade and what they actually are.
In the next breath when asked what you liked and are holding you praised the Canadian JDSUniphase as being "Priced to Perfection" and then moved on to Teklogix (TKX:TSE) saying "this is a turnaround stock that was C$4.00 and although I own allot of it, it had a terrific run and it's at the C$21 range, I think we can see C$30-35." Now I like JDS, points to you here, but they have a negative EPS and you can't equivalate a P/E, thus no multiples...my score point. RIM has a positive EPS therefore you can have a high P/E multiple. Teklogix was recommended by you over 2 months ago on CITY TV when it was trading at C$22.75, you also gave that C$30-35 target and yesterday it closed at C$21.60...my score point again. I agree that this is a fine company but this is not a emerging stock, unless you consider that the Bar Code wireless industry is where things are at today I am not one for dishing a stock, but you asked for it Duncan!!!!
I can't believe you made these statements on Canadian TV, thank goodness it wasn't on any US program as you'd never be invited back again, they don't like it when they invite a supposedly informed investment strategist only to find that one has not done his homework and just talks off the top of one's head. What an embarrassment you are to the Canadian investor. This is now trading as a NASDAQ stock and if you're getting razed by your clients, who are investing in your Navigator fund, for not buying RIM in the early stages or for selling it too early, don't put it down in order to buy in at a lower rate. You should just continue to degrade Nortel, you know like when you roughly said, on CITY TV, that "this company needs major announcements on orders everyday just to sustain it's share price, if they cease to make these daily announcements they will have a hard time sustaining their share price."
I am not blind to RIM's performance nor am I in love with their stock as I realize that it will drop later and then rise again until they once more file yet another profitable quarter and have released more news of money making ventures. Then everyone can wipe their brow to jump back in. Sure sell high buy low, but RIM has entered a different realm now.....no one can accurately predict where it is going.....NO ONE Stewart.
Take your blinders off and stop playing in the sand box.