Price Momentum Rises for Research in Motion

NEW YORK ( TheStreet) -- Research in Motion ( RIMM) has been Wall Street's whipping boy for quite a while. The recent earnings report shows the stock may not be as bad as most of the analysts have thought. A comparison of the stock's price with some of the other telecommunications stocks show the price momentum has been very good.

The graph provided by Barchart reveals over the last two and a half months RIMM was up 29% while American Tower ( AMT) was up 5%, Crown Castle ( CCI) was up 6% and SBA Communications ( SBAC) was up 11%.

Founded in 1984 and based in Waterloo, Canada, RIM makes the Blackberry mobile phones and supporting software and technology, including application suites and services for the enterprise sector.

Factors to consider:

Recently the stock has an 88% Barchart technical buy signal and a Trend Spotter buy signal. The gained 9.87% in the last month and has a 57.25% relative strength index. Currently, it is above its 20-, 50- and 100-day moving average and Barchart computes a technical support level at 8.45. Recently the stock is trading at 8.56, above its 50-day moving average of 7.67.

The recent earnings release surprised a lot of analysts on Wall Street and revealed things are not as bad as predicted. Thirty five brokerage firms have assigned 47 analysts to monitor the numbers and they have revised their projections. Although revenue is expected to be down by 40.10% this year, the Jan. 30th release of the new Blackberry 10 smartphone should level out revenue next year.

The company is actually selling more phones and signing up more subscribers now. Earnings are estimated to be down 130.60% this year but cost saving measures are predicted to result in earnings to be up 55.60% next year and increase annually by a 10%-plus rate over the next five years.

The price-to-earnings ratio is 6.83% and compares favorably to the 15.2% P/E of the market The financial strength is B+ and TheStreet rates this a D+ stock.

Individual investor interest is high with 5,800 readers of Motley Fool giving the stock a 76% vote to beat the market. Wall Street analysts have four buy, 26 hold, 11 underperform and six sell recommendations in place.

Other stocks in the telecommunications industry:

American Tower has a B financial strength and is rated A- by TheStreet. Revenue is expected to be up 11.40% next year and earnings to increase by 18.28% annually for the next 5 years.

Crown Castle has a B financial strength and is rated B by TheStreet. Analysts project revenue to be up 6.50% next year and earnings to increase by 20.45% annually for the next 5 years

SBA Communications has a C++ financial strength and is rated C by TheStreet. Revenue is predicted to be up 25.10% next year and earnings to increase by 17.00% annually for the next five years.

Conclusion: RIM is not a stock with great fundamentals, but the recent price momentum signals pessimism may have depressed the price more than warranted.

It's hard to ignore a company with expected revenue of $11 billion. This is not an investment for conservative investors but traders willing to take a speculative position should benefit over the short run.

There are over 95 million shares sold short at over seven days trading activity that will need to be covered if the upward price momentum persists. Play the moving averages and turtle channels to know when to get out:

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.