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Changes in telecom land happen so fast, many players who were on top yesterday, can find themselves fighting for survival the next. We can see this happening today before our very eyes. While big names like Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) are ripping higher as they dominate the space and increase market share, Research in Motion (RIMM) is finding itself wondering how it will survive the changing world it operates in.

It is usually during times like these, though, that patient value investors step in and pick up dollar bills for 80 cents. When the prospects of a company are most bleak, and the future seems doomed, brave investors can make wonderful long term returns by buying when no one else has a reason to.

I want to give reasons why I think RIMM is offering investors good value, even though the prospects of the company are dire currently. Given the right price, even bad companies can be great investments. Just look at junk bond land. How many people have made millions if not billions buying defaulted debt over the years?

RIMM's first quarter earnings dropped 3.6% even though revenue rose 16%, which was below expectations. Blackberry shipments are slowing, and sales are starting to shift towards lower margin products at the company. RIMM is losing customers by the boatload to Apple and Google, whose phones are much more exciting than RIMM's same ol' product. Production delays continue to hamper the company and frustrate customers. The company is being forced to reduce the workforce, and a number of top executives are fleeing the company on their own. Takeover rumors are beginning to swirl around Wall Street as the company has seen its market cap drop 80% from its peak.

That is enough to scare any retail investor away. But as you might be aware, doing what most retail investors do is usually not the best way to make money in the long run. If you had an extra $12.63 billion laying around, you could take control of 100% of the company today. The market cap is $14.63 billion as I write this, but the company has $2 billion in cash and $0 in debt. So the true cost to purchase the company would be $12.63 billion. By doing that, you would now own a company that has the biggest foothold on the corporate mobile device market.

That is not the exciting part, though. Sales ending fiscal year 2009 were $11 billion. In 2010 they were $15 billion. Last year, which ended February 2011, sales were just under $20 billion. So the company is not dying by any stretch of the imagination. During that time, net income went from $1.893 billion to $3.4 billion last year, nearly doubling. Most exciting is the free cash flow the company is generating. Last year the company earned just under $3 billion in owner earnings (free cash flow). Think about that. For $12.63 billion today, you can buy a business that last year earned $3 billion for you. That is a 23.7% return, per year, if the company just stays flat with its earning potential.

Let's be conservative and assume the company will lose 30% more market share, thus seeing its free cash flow drop 30%. That is still a 16.59% return on your money, assuming a drop that is larger will likely happen. You could easily see 100% of your investment returned in about five years if the company stays flat with performance.

The prospects going forward are not great for RIMM. The company is going to be facing ever-increasing challenges. But at $12.63 billion of market cap and no debt, someone like Miscrosoft (NASDAQ:MSFT) would be very wise to use its cash hoard to pick this company up and dominate the corporate mobile device space.

At this valuation, RIMM should look to borrow $12.63 billion and buy itself. Let's say it can only borrow at junk bond rates of 10% (which wouldn't happen, but let's be conservative). Interest costs alone would be $1.263 billion per year. Assuming 30% cuts in cash flow from last year, it would still have $800 million per year left over after paying the interest on the debt it uses to buy the entire company. That's a 6% net return, and it wouldn't have to deal with shareholders and analysts.

Source: Finding the Good in Research In Motion

Additional disclosure: We are long all stocks mentioned except for GOOG in client accounts.