Baskin, who describes himself as a value investor, says he is not troubled by the fact that the S&P 500 recently hit a five year high because he says corporate balance sheets have improved to support such a move, and many companies have greatly increased their dividends. In a low interest rate environment, he says, this makes the equity markets appealing.
The Baskin portfolio manager says he looks more at individual stocks more than sectors, but says he is deemphasizing resources, because global growth is slow and there appear to be substantial stockpiles.
One non-resource play Baskin is intrigued by is Research in Motion. He says the speculative value of RIM could be enormous. Baskin says one cable and wireless expert he trusts says RIM’s 80-million strong subscriber base is an overlooked asset that could be worth as much as $80 billion dollars, or $1000 dollars per subscriber. But Baskin says RIM is speculative because he doesn’t know whether the company could ever find a buyer to unlock that value.
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Late in September, RIM released Q2, 2013 numbers that weren’t nearly as bad as expected. The filing showed RIM lost $235 million, or $0.45 cents per share on revenue of $2.9 billion, which was up 2% from the company’s $2.8 billion topline in Q1. The numbers bested the street’s consensus that RIM would lose $.54 cents a share on revenue of $2.5-billion. Days before the quarterly results were released, the stock got a much needed boost after CEO Thorsten Heins revealed, at the company’s developer conference, that subscriptions for its BlackBerry service grew to 80 million.
RIM, which expects its much anticipated BlackBerry 10 devices will be available early in 2013, ended the quarter with cash, cash equivalents, short-term and long-term investments of $2.3 billion, up from $2.2 billion at the end of the previous quarter.
At press time, shares of Research in Motion on the TSX were up 1.3% to $7.71.