The Bull Case for Research in Motion (RIMM, NOK)

Includes: BBRY, NOK

BlackBerry maker Research in Motion (RIMM) will get a judgment this week in its longstanding patent-infringement case brought by privately-held NTP. With RIMM stock down about 20% this year, some analysts see an upside jump on the horizon. From CNNMoney's Paul R. La Monica:

"NTP only wins if they get paid out," said Barry Richards, an analyst with Paradigm Capital, a Toronto-based investment bank. "They don't win if RIM goes to zero. NTP is looking for money, plain and simple. And RIM has a lot of cash."

As a result, the true worst-case scenario most likely isn't that RIM will be prevented from doing business in its biggest market. Rather, it's that the Canada-based company will have to pony up more loonies to forge a new settlement with NTP...

Richards points out that RIM should be able to post extremely strong results in its next two quarters thanks to strong holiday sales. What's more, RIM has two new products coming out in conjunction with leading U.S. wireless companies, the BlackBerry 8700 for Cingular and BlackBerry 7130 for Verizon Wireless.

As such, analysts expect RIM to post earnings increases of 25 percent in this fiscal year, which ends in February, and 40 percent in its next fiscal year. Despite this strong growth, RIM's stock trades at just 18 times next year's earnings estimates...

Of course, there are other risks. RIM is coming under increased competitive pressure from the likes of Nokia (NYSE:NOK), Microsoft (NASDAQ:MSFT) and Ericsson (ERICY).

Nokia in particular is stepping up its efforts in wireless messaging, announcing the acquisition of wireless data and e-mail synchronization software company Intellisync (NASDAQ:SYNC) last week.

Nonetheless, RIM has been in the crosshairs of Nokia, Motorola (MOT), Palm (PALM) and others for nearly a decade now and despite that, it has been able to keep growing thanks to its loyal group of users. So investors should not fret too much.

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RIMM 1 yr. chart: