Investors should consider buying shares of BlackBerry maker Research In Motion Ltd., according to Laszlo Birinyi, who advised clients to buy equities before they bottomed in March 2009.
“It is a long shot, but it is an idea which no one has considered,” Birinyi, founder of Westport, Connecticut-based Birinyi Associates Inc., said in an interview today on Bloomberg Television’s “In The Loop” with Betty Liu. “They still have some patents, they still have a product, they still have a brand,” he said. “Every once in a while you want to go out there and take a shot.”
RIM shares fell 73 percent this year in U.S. trading through yesterday. The company said this month that third-quarter revenue missed its forecast amid accelerating market-share losses for BlackBerrys and PlayBook tablets to Apple Inc. It was the fourth straight period sales missed analysts’ estimates, putting pressure on co-Chief Executive Officers Jim Balsillie and Mike Lazaridis as they seek to revive the Waterloo, Ontario-based company that once dominated the U.S. smartphone market.
Leon Cooperman’s New York-based hedge-fund operator Omega Advisors Inc. bought 1.43 million RIM shares last quarter and said in November that RIM’s new operating system will “surprise people.” The stock closed at the lowest level since May 2004 yesterday.
Birinyi also recommended Apple, which has rallied 21 percent in 2011, and Hermes International SCA, the French maker of Birkin bags and silk scarves. Hermes has advanced 43 percent this year.
The former Salomon Brothers Inc. equity trader said that while he remains positive on equities, investors should avoid getting too bullish. He said they should buy stocks that are shielded from a potential slowdown in the economy caused by the European debt crisis.
“This is a market which to us is one where you would back off,” he said. “We still would participate. We don’t want to get defensive, but I don’t think it’s a market where you can be aggressive because there’s too many moving parts. There’s too many variables, which I don’t think we can really all put together in some sort of coherent model or game plan.”
The S&P 500 has failed to remain above its 2010 closing level of 1,257.64 after closing above it nine times since the end of October. The measure plunged as much as 19 percent between April 29 and Oct. 3 before rebounding 11 percent through yesterday, when it was down 2.5 percent for the year. Financial stocks have dropped the most in the S&P 500 in 2011, losing more than 20 percent as a group.
“Forget financial stocks,” Birinyi said today. “There are too many variables, and more than anything else, they are the ones that are going to be affected by what is going on in Europe.”