What Cramer Did Not Tell You About Research in Motion Stock 18 comments
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I realize Jim Cramer is taking a lot of heat lately in the press and I will start by saying I am not here to pile on. That said, I want to add to some of the comments he aired on Tuesday, April 7 about Research in Motion (RIMM).
Jim had a great segment discussing his views on RIMM. He went on and on about the fundamentals of the company and that it was well positioned going forwarded.
He also mentioned that his ‘technical guy’ believed the technicals (charts) were looking very good and that RIMM had formed a beautiful W pattern and has broken out recently. In the last couple of days he mentioned that the stock had pulled back and he believed it to be a good buy at this time in the low 60 dollar range.
All of this sounds great and I admit the chart looks good, but…
What did Cramer not tell you that you should know? The simple fact that company insiders are selling. I always hate to see insiders selling when I am thinking of buying. The question we should always ask is: why should I be buying if the insiders are selling?
Yes, there can be numerous reasons for corporate insiders, officers and directors, to be selling, i.e., to raise money to pay taxes, kids college expenses, the possibility of poor news coming out of the company in the near future, etc.
Just one insider selling would not necessarily make me nervous, but when we have several insiders selling, well, investors should pay attention.
In the case of RIMM, there have been a total of 7 insiders selling consistently since October 2008 at prices between $72 to as low as $42 - totaling around $32 million. Only one insider bought in October 2008. He must not have gotten the memo!
To get a little more current, over the last 90 days there were 5 insiders selling (no buys) for a total of around $13 million. The ‘good news’ is that there have been no sells since February 19th and no selling into the recent rally, at least, at last reporting.
Research in Motion is actually a Canadian company and their reporting requirements are in Canada, not the U.S., so perhaps this was under Cramer’s radar screen for analysis.
I’ll leave the conclusion up to each investor, but you should always be aware of what the corporate insiders are doing, i.e., buying, selling or nothing before you enter your trades.
They could be selling to you... and that’s something all investors should consider.
Disclosure: No Position
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This article has 18 comments:
One reason you did not mention, that clients of mine were forced to do in the past is: Their company stock options were about to expire and the executive doesn't have the cash available to execise the option and hold (pay for the stock at the exercise price and hold the stock). Therefore he is forced to exercise and sell the stock to at least take the profit between the exercise price and the current market price.
Your article does not add any value!! Please think twice before posting something like this gain. This information is available on any finance website.
BTW, I am waiting for your next article about AAPL. You may enlighten us that AAPL's cash position is reduced from $26B to $25.65B.
If even I can see these killer expenses for Rim, who can fail to see where Rim is heading? and the insiders taking whatever they can leaving a rapidly sinking ship?
And User 392224, I agree. This guy should try to get something solid to write about. Since Rimm reported on April 2, anyone selling i think would be a bit foolish...probably from the Motley fool gang...
Rim has always had competitors, and they aren't starting to quake now. Their fundementals and guidance speak for themselves.
There are many reasons insiders may be sellings, and options is just one of them.
Also, you look outright stupid again when you talk about buy-one-get-one-free hurting RIM when it is the CARRIER who is subsidizing. It it just that ALL apple fans are that stupid and don't understand this? I keep seeing this myth posted over and over.
What is funny is that JA actually tried to post some numbers but while he says apple's revenues will be up 26%, he doesn't realize that rim's revenues in the last year increased 84%!!!! And they will probably increase again at a 50% rate. God, this guy just looks dumber and dumber with these meaningless rants!
"Global High Performers
04.02.09, 06:00 PM EDT
Forbes Magazine dated April 27, 2009
A Darwinian view of the best companies in the world economy.
The world economy is in a deep recession, but these exceptional Global 2000 companies are likely to survive today, thrive tomorrow.
To choose these companies, we scored our universe on sales and profit growth, return on equity, stock market returns, debt to capital and long-term profit growth forecasts. We also required sales of at least $1 billion. To qualify, non-U.S. firms must trade as American or Global Depositary Receipts. We used outside research, including accounting and governance scores from Audit Integrity, to guide our selections.
Research in Motion ( RIMM - news - people ) of Canada has the best annualized sales growth over the past five years at 78%."
Need I say more Mr. Apple. Everyone is laying off workers, Have u listened to what RIMM is doing lately in terms of hireing. Sorry to say to your horror, but Rimm is hiring thousands, and growing leaps and bounds. So please, enough of your rubbish. try to find a job a Credit Suisse. Those guys are a bit looney too.
"Global High Performers
04.02.09, 06:00 PM EDT
Forbes Magazine dated April 27, 2009
A Darwinian view of the best companies in the world economy.
The world economy is in a deep recession, but these exceptional Global 2000 companies are likely to survive today, thrive tomorrow.
To choose these companies, we scored our universe on sales and profit growth, return on equity, stock market returns, debt to capital and long-term profit growth forecasts. We also required sales of at least $1 billion. To qualify, non-U.S. firms must trade as American or Global Depositary Receipts. We used outside research, including accounting and governance scores from Audit Integrity, to guide our selections.
Research in Motion ( RIMM - news - people ) of Canada has the best annualized sales growth over the past five years at 78%."
Not bad eh,. obiously, your ideas about this company don't fit. 25 million and growing. ouch, u don't like that do you ? Try listening to their latest conference call.
Most companies are laying off workers. Do you know what Rimm is doing Mr. Apple. Rimm is hireing thousands. They are growing leaps and bounds. So please stop your idieos dribble, and try to find a job with Credit Suisse, they are as looney as you seem to be.
A quick look at the numbers suggests that the tax rate went from 40% to 30%.
Or did, rimm report one set of numbers to wall street with another set of numbers for the tax authorities?
Some recent financial news about Rim's top management:
TORONTO (Reuters) - Canadian regulators are seeking a record penalty as high as C$100 million ($80 million) from the top two executives of Research In Motion Ltd for their role in a stock option accounting controversy dating back to 1996, the Globe and Mail newspaper reported.
Ontario Securities Commission staff are in advanced discussions with lawyers representing RIM's co-chief executive officers, Jim Balsillie and Mike Lazaridis, the paper said on Thursday, citing people familiar with the developments.
Rim culture is chaotic, dysfunctional, opportunistic. Rim users inherit this culture and behave accordingly. Verizon did not subsidize the Buy 1 Get 1 blackberry campaign 100%.
Ride the Blackberry Bold Research in Motion (RIMM), Motorola (MOT), Apple (AAPL)
Cramer proclaimed that August will be Research In Motion month, ahead of the launch of its newest product, the Blackberry Bold. “The iPhone isn't the only way to show off to your friends,” joked Cramer, who called Research In Motion a steal at just $119 a share.