Top In Research in Motion? (RIMM, AAPL, GOOG)

Shares of Research in Motion RIMM have rallied sharply along with the broader market over the last six months, rising 46%. At one point, it looked like investors had given up on this company as fears about stiff competition from Apple AAPL and Google GOOG weighed on RIMM shares. Those fears, at least in the near term, seem to have been overblown.

After the substantial rally in the share price, however, it may be time to ask if the market has gotten overly optimistic with regard to Research in Motion's future? Much of the recent hype surrounding the stock has been due to the company's new Playbook tablet. The fact remains, however, that RIMM is second-class in both the smartphone and tablet markets and it is unclear how its competitive position will play out going forward.

On a valuation basis, the stock remains cheap. RIMM trades at a trailing P/E of 11.16, a forward P/E of 9.67, and a PEG ratio of 0.52. Despite its seemingly inexpensive valuation, traders and investors can also buy AAPL and GOOG for PEG ratios below 1. At current levels, given the recent rally in RIMM, aggressive traders may want to consider shorting the stock here while going long GOOG and AAPL.