I recently saw an article that explained why BlackBerry (NYSE:BB) lost 23% of its value in February. Down 25% as I write this, the fact that BB stock has two B’s instead of one is not a good reason to buy the Canadian software company’s stock.
There Are Plenty of Options
At this point, you probably think I’m going to give you a bunch of software stocks that are better investments than BlackBerry. I will, but not in the way you think.
However, if you’re interested in possible options, InvestorPlace’s Chris Markoch discussed at the end of January seven software-as-a-service stocks to buy for consistent returns in 2021. Of Markoch’s picks, my three favorites would be Shopify (NYSE:SHOP), Adobe (NASDAQ:ADBE), and Salesforce.com (NYSE:CRM) in that order.
Now back to BlackBerry’s BB symbol.
I’m one of those weird people who likes selecting stocks in an unusual fashion. I’m always looking for an interesting angle on an investment play. For example, I recently recommended 10 ETFs to buy using the stock selections from the 10 Best Stocks for 2021 from some of InvestorPlace’s smartest minds.
To give you an idea of what I mean, the Readers’ Choice for 2021 was Nio (NYSE:NIO), the Chinese electric vehicle (EV) manufacturer. I recommended the First Trust NASDAQ Clean Edge Green Energy ETF (NASDAQ:QCLN). It is the ETF’s fourth-largest holding at a weighting of 6.7%.
In this instance, I’m focused on BlackBerry’s stock symbol, which is BB. It turns out that there are five U.S.-listed securities with a stock symbol with two of the same letters.
Here’s a table showing all five alongside BlackBerry’s performance over the past 1-year, 3-year, and 5-year periods.
BlackBerry’s 1-Year, 3-Year, and 5-Year Returns vs. Others
|Stock||1-Year Return||3-Year Return (annualized)||5-Year Return (annualized)|
|DuPont de Nemours (NYSE:DD)||33.3%||-12.8%||2.1%|
|Vanguard Large-Cap ETF (NYSEARCA:VV)||20.6%||15.2%||18%|
|WW International (NYSE:WW)||-29.9%||-28.9%||13.9%|
The Best of the Bunch
I think it’s fair to say that the best investment over any three periods was Vanguard’s large-cap ETF. None of the three periods had a negative total return. The other five stocks all had some period of underperformance.
More than anything, I think it shows that passive investing remains a potent force for good in the investing world despite a push to bring out more actively-managed ETFs.
It’s also important to point out that a chunk of BlackBerry’s performance has come early in 2021 as it benefited from the Reddit surge in late January. Since its 52-week high of $28.77 on Jan. 27, BB stock has lost 62% of its value.
In May 2017, I discussed whether BlackBerry stock could hit $15 by the end of the year. I concluded that it couldn’t, but that it likely had a better chance of moving up to $15 — it was trading around $10 at the time — than falling back to $5.
My rationale was that it had $2 billion in cash on its balance sheet at the time and projected software revenue growth of 13-15% over the next 12-24 months. In other words, things were looking up.
BB’s share price proceeded to lose almost three-quarters of its value over the next 34 months, hitting a 52-week low of $2.70 in the March 2020 correction.
How’s BlackBerry Doing in 2021?
InvestorPlace’s Louis Navellier believes that BlackBerry’s QNX embedded software for Baidu’s (NASDAQ:BIDU) Apollo autonomous-driving platform makes the company an innovator and not some Reddit “meme” stock.
That’s a possibility.
However, I see a company whose net cash is $80 million ($670 million cash minus $590 million debt), down from $1.5 billion in 2018. Meanwhile, while sales have increased slightly over the past three fiscal years from $930 million in 2018 to $1.03 billion in 2020, it’s still losing money.
The projections BlackBerry Chief Executive Officer John Chen threw out there have not come to fruition.
Sure, the Baidu partnership is notable. However, if you want to make money in 2021 and beyond, I’d take the money you’re thinking of dumping on BB and put it into VV instead.
It’s the best of the U.S.-listed double-lettered stock and ETF symbols.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.