Buy BlackBerry on pullbacks, this investor says

Like many names in the tech sector, BlackBerry (BlackBerry Stock Quote, Chart TSX, NYSE:BB) has done well to rally over the first two months of 2019. But for investors looking to get in on the stock, it might be better to wait for a pullback, says Kim Bolton of Black Swan Dexteritas.

“We did own it. We bought it just above $8.00 and we let it go just above $10.00,” says Bolton, president and portfolio manager at Black Swan, to BNN Bloomberg on Monday. “I would recommend buying it at something like the low $8.00’s. It would be a good bargain there and if you go back far enough, it really doesn’t go under $7.00.” (All figures in US dollars.)

After a positive 2017, BB took a tumble over 2018, finishing the year down 36 per cent. Yet the stock has been on the rise this year, climbing from $7.00 on January 2 to where it currently trades in the high $8.00 range.

BlackBerry recently got a boost from the federal government in the form of a $40-million grant to support its autonomous vehicle and connected car software development. For its part, BlackBerry has stated that it plans to invest $310.5 million in R&D related to its QNX platform, part of the company’s overall transformation from phone maker to security software specialist.

That process was underlined on February 21 when BB completed its previously announced $1.4 billion acquisition of California-based cybersecurity firm Cylance.

“Today BlackBerry took a giant step forward toward our goal of being the world’s largest and most trusted AI-cybersecurity company,” said John Chen, BlackBerry CEO, in a press release. “Securing endpoints and the data that flows between them is absolutely critical in today’s hyperconnected world. By adding Cylance’s technology to our arsenal of cybersecurity solutions we will help enterprises intelligently connect, protect and build secure endpoints that users can trust.”

And while questions remain on exactly how the company plans to grow its revenue stream, Bolton says that BlackBerry is positioning itself well.

“The reason people love it is because of the IP that they have, and they’ve been a big supplier into the autonomous driving, so they’ve carved out a very nice niche,” he says.