Don’t put your life savings into BlackBerry stock, this investor says

And while the company may still be progressing in its evolution from mobile phone maker to software and security business, the trajectory of BlackBerry’s (BlackBerry Stock Quote, Chart TSX:BB) share price sure has looked dismal over the past year. After reaching a five-year high at the start of 2018, the stock dropped more than 40 per cent over the ensuing 12 months.

What’s in store for BB going forward? Portfolio manager and technical analyst Keith Richards argues that the stock could return to its highs of last January but it’s a gamble, one deserving of only your throwaway money.

“We actually own a very small position and we know that this is an aggressive play for us because typically we like to trade more liquid, larger cap stocks,” says Richards of ValueTrend, to BNN Bloomberg. “We went into it knowing it was [volatile].”

“It’s a speculative position as far as we’re concerned,” he says. “They’re making some interesting fundamental headways but there’s a lot of noise along the way, so don’t put your life savings into it. It might be worth mad money, so to speak.”

BlackBerry made headlines in November with its acquisition of US cybersecurity firm Cylance for US$1.4 billion, the company’s largest purchase to date. Then in December, BB issued its latest quarterly report which featured a consensus beat on revenue, coming in at $228 million versus the expected $215.7 million. The company generated net income of $59 million, a big improvement over the $275 million loss from a year prior.

“We bought it around $13 or $14. The recent market meltdown pulled it down further and we’re underwater on this stock,” says Richards. “We haven’t sold it because it’s such a small position and we think that old support from 2016 and whatnot will hold and we think it’ll probably get back into the zone where we bought it and that ultimately some time in the future it might be worth $17 or so.”