With its iconic button keyboard the BlackBerry (BlackBerry Stock Quote, Chart TSX:BB) smartphone has a waning collection of diehards.
But what the company is more known for now is its years-long transformation from handset maker to software and security firm. Now as BlackBerry celebrates its 35th anniversary this month, maybe it’s time to ditch the BB brand, says Elliott Fishman, director of US and international equity trading at Scotia Wealth, who argues that BlackBerry’s recent run of success makes BB a sell at the moment.
Ahead of BlackBerry’s fourth quarter fiscal 2019 financials, which are due on March 27, the company looks to repeat the success of Q2, released on December 20 and featuring consensus beats on both revenue and profit, generating $226 million in revenue and $59 million in net income.
At the time, CEO John Chen spoke of the importance of its US$1.4 billion acquisition of cybersecurity firm Cylance, while the company’s outlook predicted software and services revenue growth of between eight and ten per cent for its fiscal 2019.
“We delivered another solid quarter of performance, resulting in year-over-year double-digit percentage growth for total software and services revenue, earnings per share, and free cash flow” stated Chen in a press release. “I’m excited about the pending Cylance acquisition as it will extend our strategy with cutting-edge AI cybersecurity capabilities and, combined with BlackBerry’s capabilities, present the opportunity for revenue acceleration in our businesses, including UEM, QNX and Spark.”
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BB has done well over the past couple of months to dig itself out of a downward trend it had been on for much of 2018. The stock is now up 30 per cent year-to-date. But Fishman argues that there’s little good news from a technical perspective, making now a good time to sell the stock.
“I think BlackBerry should change its name. They don’t do what they used to do, and I think they’re getting penalized for that,” says Fishman to BNN Bloomberg on Monday. “But if we’re looking at a straight technical analysis, it had that big selloff to a support level [at $9.00] and held. Now we’re at an old support level [at $12.00] which is now a resistance level. Around this level here, if I’m trading it I’m selling it.”
“I do like what they’re doing. I just think it’s constantly handcuffed by the BlackBerry name. If Google can change their name, so can BlackBerry,” he says. “The stock itself is quite range-bound here and at this level it needs to show me that it can get through.”