BlackBerry (BBRY) Stock Deserves a Second Chance

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BlackBerry (BBRY) doesn’t feel sorry for the broader market, despite the fact that BBRY is suffering a painful breakdown. BBRY stock has been on the receiving end of a brutal battering for years now.

Why BlackBerry Stock Deserves a Second Chance (BBRY)Worth over $200 per share before the Great Recession, BlackBerry has been in a race to the bottom ever since.

From today’s standpoint, even 2011 (when BBRY was only worthy a fraction of that $230 high) feels like the good ol’ days. A $50 price tag is far better than BlackBerry’s current single-digit offering.

After nearly 40% year-to-date losses, BlackBerry’s stock is sitting below $7. Savvy investors, however, could see that price as a discount, and now just may be the perfect time to load up on BBRY.

Making the Case for BBRY

BlackBerry stock’s uber-low levels are especially appealing in a market where investors are searching high and low for affordable stocks. While theoretically, the actual share price shouldn’t matter — a $700 investment could buy 100 shares of a $7 stock or 7 shares of a $100 stock — it can play a psychological role.

Combine the low-price appeal from an oversold stock with a company actively working to correct its course, and you have yourself one sneaky gamechanger.

BlackBerry, despite the fact that it’s recently become somewhat of a punch line, is still riding the right wave — a tech mega-trend that has everyone glued to smartphones at home and at the office. But there are many aspects of a smartphone, and BlackBerry is smartly diversifying away from its dependence on hardware and even turning to Android for the operating system of its next offering.

Because the smartphone market — and the app market, specifically — is two-sided, a popular OS like Android could help attract more developers and get the ball rolling in the right direction for BBRY.

Of course, it’s understandable why many folks are wary of BBRY, considering revenue is expected to decline from 2015 to 2016, while the analyst consensus for the current quarter has widened from a two-cent loss to a nine-cent loss in the last few months.

But to be frank, the laundry list of reasons why BlackBerry is struggling is old news. The problems and damage are already built into the share price after the ugly and seemingly never-ending decline.

Besides, there were some bright spots in the most recent earnings report on top of the positive catalysts I mentioned. For starters, BlackBerry posted positive free cash flow of $123 million — not too shabby at all.

The diversification was further evidenced by a 150% increase in software and licensing revenue, and a sales mix that was just 40% hardware. And the potential momentum was showcased by a loss that narrowed year-over-year, on top of a solid 2,600 enterprise wins.

Put it all together, and BlackBerry stock has some hidden gems, despite the fact the market has focused on the rough terrain BlackBerry’s traveled the past few years.

As investors start hunting for affordable picks, though, that momentum could shift in BlackBerry’s favor — and you want to be riding it.

Hilary Kramer is the editor of GameChangersBreakout Stocks Under $10High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/08/blackberry-bbry-stock-deserves-a-second-chance/.

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