Shares of Motorola (MOT) are getting smacked in pre-market trading after the mobile phone giant shocked Wall Street yesterday by forecasting a first quarter loss. After having failed to find another hit after the wildly popular RAZR phone, rumors are swirling that Motorola may buy handheld maker Palm (PALM) to boost its product offering. As you can see from the chart below, shares of MOT are nearing multi-year lows.

Is it worth it to bargain hunt in this stock? After all, shareholder activist Carl Icahn recently purchased a stake in the company and his calls for increasing shareholder payouts in the form of dividends and buybacks will likely only get louder with yesterday's announcement.

Motorola has always had a ton of cash on its balance sheet and that is still the case. After netting out $4.4 billion in debt as of December 31st, the company has $12.3 in cash. That equates to a stunning $5 per share (Motorola is indicated to trade at $17 and change at the open this morning). With trailing earnings of $1.19 in 2006, MOT shares are pretty cheap.

That said, given how hard the cell phone business is, perhaps Motorola deserves a below-market multiple during tough times. After all, exciting new products aren't right around the corner, and if they go ahead with an acquisition of Palm, it's hard to think Wall Street will be drooling over the move.

Although shares of Motorola are down significantly, I probably wouldn't want to step in yet. As you can see from the chart, the stock got down to the $14-$15 area the last time the company hit hard times. If we got back down to those types of levels, I would be more inclined to bargain hunt in the name.

Full Disclosure: No positions in the companies mentioned at the time of writing