BlackBerry is a survivor, this portfolio manager says

BlackBerry’s (TSX, NYSE:BB) share price may not be hitting the $30 mark anytime soon, as predicted by CEO John Chen, but there’s still a lot to be positive about concerning the erstwhile mobile phone leader, says David Cockfield of Northland Wealth, who hints that a takeover may be in the cards.

BlackBerry shareholders have been on an interesting ride over the past couple of years. 2017 saw BB become a rebound tech favourite, rising 52 per cent over the year and hitting highs not seen for half a decade — only to lag in 2018, where the stock is now off four per cent for the year. Recently, BB’s share price dipped briefly below a C$13.00 support level but has rallied since early August.

Company head John Chen, who took over the reins in 2013, has received much of the praise for resurrecting BlackBerry, transforming the company from a cellphone maker to a software and security services company, and earlier this year, shareholders rewarded the CEO with a contract extension, complete with a lucrative performance bonus if the stock reaches the US$30 mark on the NYSE (currently, BB is trading at US$10.34).

But that goal is still just a pipe dream, says Cockfield, managing director and portfolio manager at Northland Wealth, although he’s not counting Chen out.

“This is a real success story,” Cockfield told BNN Bloomberg recently. “A few years ago, most investors thought that BlackBerry was a write-off, that it was dead in the water and would never recover. [Chen] has done a great job in restructuring the company. It’s now poised to benefit from his management.”

“It is surviving and I think it’s going to continue to survive,” says Cockfield. “It’s a tough business to be in and [$30 per share] is an ambitious objective. I wouldn’t want to speculate on that but I see it as surviving and doing better. We have a pretty good environment right now. It may be tougher, let’s say, in a recession.”

Cockfield says BlackBerry’s cache of patents that it has built up over the years make it ripe for a potential takeover.

“It’s still speculative,” he says. “There’s no dividend. I would still wonder whether at some point in time because the company has some pretty good patents that somebody might take a run at it. I think people who are in that business look back at Nortel, and what they did with Nortel was that they waited until it was dead and the shareholders got nothing and the debt holders got all the really good patents and things like that.”