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Beaten down BlackBerry stock is worth a look again, this portfolio manager says

BlackBerry's Stock

With its share price now down 32 per cent since an early January high, it’s safe to say BlackBerry (BlackBerry Stock Quote, Chart TSX, NYSE:BB) has had a rough ride in 2018.

But now that it’s a lot cheaper —and with the company’s lengthy makeover all but complete— the stock may be a buy, says portfolio manager Kim Bolton at Black Swan Dexteritas.

“We actually bought it a couple of years ago down at $8.00 and sold it up at $11.00,” says Bolton, in conversation with BNN Bloomberg. “We just didn’t get back in. We made some good money at it and then found that over the course of this year that it was sort of dead money.” (All figures in US dollars.)

BlackBerry was one of Canada’s tech sector darlings in 2017, as the company’s pivot from mobile phone maker to software and security company looked to be a success. And while its business is still progressing —BB posted another in a line of consensus beats on earnings for its last quarter— the share price has suffered, dropping from a high of $14.55 on January 9 to its 52-week low of $8.63 reached this week.

On September 28, BlackBerry announced its second quarter fiscal 2019 financials, which featured revenue of $210 million, down 12 per cent from Q2/18, to go along with a profit of $43 million, more than twice that of the previous quarter.

BlackBerry has made a point of concentrating on security features for Internet of Things connectivity for the enterprise market —the so-called Enterprise of Things— with platforms such as the BlackBerry Spark which was launched in September.

CEO John Chen spoke of his company’s EoT vision at the announcement last month of its partnership with healthcare tech company Mackenzie Innovation Institute.

“We are applying our expertise in security, data privacy and communication work in regulated industries such as automotive, financial services, and government to tackle one of the biggest challenges in the healthcare industry: leveraging healthcare endpoints to improve patient outcomes while ensuring security and data privacy,” said Chen in a press release.

Bolton says the has nothing against BlackBerry, even though he’s not invested in it at the moment.

“It has a tremendous product, particularly servicing over into the autonomous driving side, that was very, very competitive, although there have been a lot more entrants coming into it,” he says. “Now that it’s down under $10.00 on the [NYSE], it’s probably worth taking a look at.”

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About The Author /

Jayson MacLean
Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.

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