Is BlackBerry getting interesting as an investment?
With BlackBerry (BlackBerry News, Stock Quote, Chart TSX, NYSE:BB) now putting the finishing touches on a multi-year transformation, opinions continue to vary on whether or not the company will come through on promises of recurring revenue from its security and software business.
But those unknowns concerning BB’s business model shouldn’t stop the savvy investor from taking a good look at the stock, says fund manager Kim Bolton of Black Swan Dexteritas, who claims BlackBerry’s slide over the past few months is making it a potential trade pick.
Currently sitting at $7.12 as of early Tuesday, BlackBerry has lost 30 per cent of its value since late March. The slump is bringing it close to the high $6.00 range, a low that the stock has hit a number of times over the past few years right before climbing higher. (All figures in US dollars.) The scenario is starting to look tempting, says Bolton.
BlackBerry starting to look like an interesting investment…
“This is one of those stocks that we don’t invest but we do trade,” says Bolton, founder and portfolio manager at Black Swan, to BNN Bloomberg on Monday. “We’re looking at it very, very closely right now because it’s trading under $8.00. We will buy it if it can get down not too far from this point. It actually got down to that level in that swoon at the end of the last year.”
Bolton says BlackBerry has done well to reposition itself in light of the collapse of its cellphone business and that similar transformations have been performed by other formerly hardware-focused companies.
“They’ve got the right idea with the acquisition of Cylance and it has really given them great credibility around the world and a longer revenue runway,” he says.
“It’s a difficult transition from hardware to software, but some of them have done fabulously. Look at Cisco, they’ve done a phenomenal job of building up their software side and getting that recurring revenue growth that you can get out of the subscriptions in software as a service and so on,” Bolton says.
BlackBerry reported its most recent fiscal quarter in late June, where it beat analysts’ estimates with adjusted revenue of $267 million and adjusted earnings of $0.01 per share.