Hudson Square Research Rates Palm (PALM) A Hold
April 12, 2010 2:23 PM
Hudson Square Research analysts Daniel Ernst and Scott Tilghman rated shares of Palm, Inc. (Nasdaq: PALM) a Hold.
Amid the increased speculation that Palm is for sale, the Hudson Square Research analysts decided to review the company's strategic possibilities.
Although Hudson Square Research doesn't issue price targets for Hold rated stocks, the analysts noted that Palm shares trade at 0.9x their FY11 (May-11) sales estimate, vs. ~2x for its peers.
The Hudson Square Research analysts wrote, "given our belief that success in the smartphone market requires a tight integration of hardware and software, we believe there should exist significant interest from strategic buyers. In our view, a key element of the success of both Apple and RIM is those firms’ ownership of both the hardware and software engineering process. Therefore, we believe other handset makers currently reliant on third-parties for their smartphone operating systems are logical potential buyers. Similarly, we believe PC firms seeking to establish a presence in mobile are also potential bidders. We note Palm’s current market cap is roughly equivalent to the annual R&D budget at RIM."
