Analysis: Canadians who follow RIM take pity on a local hero

Tue Jul 26, 2011 10:39am EDT
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By Alastair Sharp

TORONTO (Reuters) - Wall Street and Silicon Valley have issued verdicts on Research In Motion, and they are mostly damning for the BlackBerry maker. Canadians, on the other hand, are eager to give their compatriot the benefit of the doubt.

In both the smartphone and tablet computer markets, the momentum belongs to Apple, which edges ever closer to the title of world's most valuable stock, and Google, its Android software embraced by an army of device makers.

By contrast, RIM's shares have fallen 60 percent from a February peak, hammered by a litany of bad news. The company has missed its own limp quarterly forecasts, suffered crucial delays in bringing advanced smartphones to market and elicited yawns when it launched its long-awaited PlayBook tablet.

In the latest sign of decline, RIM said on Monday it will cut 11 percent of its workforce, even as it rushes to pull off a tricky transition to a new Blackberry operating system.

Against that backdrop, there is a discernible gap between Canadian and non-Canadian analysts covering the struggling Ontario-based technology leader. Put simply, the Canadians have a lot more time for their national champion.

One in five analysts covering RIM currently suggest buying the stock. But the ratio is one in three for Canadian analysts, and many Canadians think the stock sell-off is overdone.

"The pessimism of the big U.S. bulge-bracket firms is really what presumably has driven the stock to the levels that it's at," said Paul Taylor, chief investment officer for BMO Harris Private Banking. The Bank of Montreal unit manages C$14.5 billion ($15.3 billion) for wealthy Canadians and holds less than C$100 million of RIM stock.

"It irks them to think a Canadian company could possibly have the backbone to compete with the likes of Apple," said Taylor, who clearly thinks investors aren't giving RIM a fair shake.   Continued...

<p>Mike Lazaridis, president and co-chief executive officer of Research in Motion, speaks at the RIM Blackberry developers conference in San Francisco, California September 27, 2010. REUTERS/Robert Galbraith</p>