RIM's new shine comes from patents

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Research In Motion Ltd. certainly benefited from Google Inc.'s move on Motorola Mobility Holdings Inc. on Monday: The shares enjoyed a nice bounce – presumably on the basis that if Motorola was attractive as a takeover, then maybe the BlackBerry maker will be too.

But can investors really expect a move on the BlackBerry maker? Kris Thompson, an analyst at National Bank Financial, raised his recommendation on RIM to "sector perform" from "underperform" but stressed that the improved outlook has more to do with what the Google-Motorola deal means for RIM's valuation.

"We believe Google's acquisition of Motorola will set a floor-value for RIM's shares around current levels," he said in a note. "Combined with a potentially better than expected Q2 (August) with the earlier than expected BB 7 smartphone launches, the stock could have some near-term support."

Okay, that doesn't exactly sound like Microsoft is counting the cash in its treasure chest – and indeed Mr. Thompson left his target price on RIM unchanged, at $25. However he does offer some interesting numbers on how RIM might be a more valuable company than originally estimated.

His earlier estimation was based on RIM operating a "niche enterprise business and perhaps a fringe consumer segment," with annual cash flow of about $1.5-billion. Value: $15-billion. Add to that $3-billion for cash and investments, along with $5-billion in patents.

However, the Google-Motorola deal stressed the value of the Motorola's patents. And don't forget that the value of Nortel's patents was much more than observers had expected when they sold in auction recently. So, Mr. Thompson now thinks that RIM's patents could be worth double his earlier estimate, or $10-billion.

"It's hard to say, but speculation could lift the stock in the near term," he said.