Charles Sizemore of Sizemore Capital Management chats with me about the three smartphone stocks at the top of the industry — Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Research In Motion (NASDAQ:RIMM).
Here are the highlights:
Research In Motion: I continue to be bearish (all the way up, admittedly) on RIM and Blackberry going into the Jan. 30 event that will unveil a new line of BlackBerry 10 devices. Charles agrees with me that Research In Motion’s enterprise dominance is in question vs. other smartphone stocks, and that the consumer market might be too little too late. Sure, we’ll likely see a third player — but that’s more likely to be the Windows Phone from Microsoft (NASDAQ:MSFT), not RIMM. But what do we know, since the stock has almost tripled from its September lows.
Apple: I like this stock even after Apple Q1 earnings, and remain one of those trapped AAPL longs out there. My position is finally in the red, but I am actually plotting buying more if it hits $425, with a long-term horizon of 18 to 36 months. Charles also thinks Apple remains a very strong company and might be a bargain, but the bottom line is that the short-term volatility is dangerous and there could be considerable downside momentum in the next few months. That’s what happens when a crowded trade sees a race for the exits.
Google: Last but not least, while Charles and I agree on the first two smartphone stocks, we differ on Google. I think that it’s a bullish sign that the ad business seems to be stabilizing and they have a lot of products in the pipeline that could fuel future growth — such as its dominant Android OS. Charles is skeptical, however, that GOOG can maintain its ad edge and wonders if any of the cute projects (like self-driving cars) will ever hit the bottom line.
- Read more about my bullish case for Google after earnings. (The Slant)
- Of course, Charles thinks Google might not even be around in 2020. (Sizemore Insights)
- A long-term AAPL problem — teens don’t think it’s sexy anymore. (CNET)
- RIMM might smell blood in the water right now after Apple earnings. (Globe and Mail)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he held a long position in AAPL.