Canadian tech stalwart BlackBerry (BlackBerry Stock Quote, Chart TSX:BB) may have come a long way over the past few years in reinventing itself as a software company but there’s less good news in the stock, which has fallen off the relative highs it set early last year.
And climbing back won’t be a quick and easy task, says Hap Sneddon, whose argues that on a technical basis, BB’s path may be difficult.
“We own BlackBerry,” says Sneddon, chief portfolio manager and partner at CastleMoore Investment, to BNN Bloomberg on Monday. “Just like the rest of the market, it has shown a propensity to go up [in 2019]. It’s getting a little stuck sideways. We’re going to run into resistance where there was that breakdown in October around the $13 range.”
“If it moves higher, sort of breaking new highs, there are a lot of places where it’s going to have to chew through supply where a lot of people had bought higher,” he says. “More people bought higher than lower on this stock, so you’re naturally going to have to eat through all of that supply.”
BB rose from the $11 level back in mid-2017 to a high of $18.14 by January 9, 2018. From there it fell to a low of $8.94 by December 24 before working its way back up in 2019. So far, BB is up almost 27 per cent year-to-date and closed on Monday at $12.32, down 0.4 per cent.
BlackBerry delivered its fourth quarter and year end financials in late March, achieving consensus beats for both revenue and earnings. BB’s top line for the quarter was US$255 million, up from US$233 million a year prior and better than the expected US$241.3 million, while the company’s US$51 million in profit or US0.11 per share bested the expected US$0.06 per share.
“BlackBerry is a stock that’s part of those pro-growth [sectors] including base metals, energy and technology, which is really a key driver in that,” says Sneddon. “BlackBerry has managed to reinvent itself with a lot more recurring revenues. It’s not your uncle’s Research in Motion or BlackBerry.”