Avoid BlackBerry stock, this investor says

BlackBerry (BlackBerry Stock Quote, Chart, News TSX:BB) has done well to pull itself out of the COVID-inspired first-quarter funk, but it’s just not a stock that should be garnering too much attention when there are so many better options out there.

That’s the take from Darren Sissons of Campbell, Lee & Ross, who would prefer OpenText from the Canadian group of tech stocks.

BlackBerry is in the news this week as the federal government has announced a new contract tracing application for Canadians who test positive for COVID-19. Prime Minister Justin Trudeau announced a partnership between the government and employees from both BlackBerry and Canadian e-commerce company Shopify in the creation of the app, which is slated for initial testing in Ontario and to be available across the country by the start of July.

Set to report its earnings next week, BlackBerry’s last quarter, its fiscal fourth delivered in late March, featured a surprise beat for top and bottom lines, with the company generating non-GAAP EPS of $0.09 per share on non-GAAP revenue up 13 per cent to $291 million. Analysts had been calling for earnings of $0.04 per share on revenue of $287 million.

And while the company’s transformation from phone maker into a software and security business may pan out in the end, the market has seemingly soured on BlackBerry’s potential, having consistently pulled the company’s share price lower over the past two-and-a-half years.

Sisson says investors would be better served looking elsewhere in the tech field.

“Obviously, we’re all relatively familiar with the BlackBerry story, and that they're now in the process of having somewhat of a turnaround,” Sissons said, in conversation with BNN Bloomberg on Thursday.

“The challenge for me with BlackBerry is there are just better opportunities that we can look to. The semiconductor space is kind of interesting and I think they're out there opportunities in the cloud space. Even here in Canada, I think OpenText is an interesting company,” Sissons said.

So, I'm not a huge fan of Blackbird at these levels,” he said. Year-to-date, BlackBerry is currently down 17 per cent, while over the past 12 months the stock is down 41 per cent.

BlackBerry also announced this week the release of endpoint detection and response product BlackBerry Optics v2.5.1100, to be used in cryptojacking detection for Intel-based commercial PCs. Cyryptojacking is the use of malware to hijack computer power for cryptomining purposes, a practice which often makes use of home PCs as well as computer power from businesses to pool together resources.

“Given the cost associated with mining cryptocurrency and the payments of ransomware demands on the decline, cryptojacking becomes an attractive option for threat actors to generate revenue,” said Josh Lemos, VP, Research & Intelligence, for BlackBerry, in a press release. “With our new cryptojacking detection and response capabilities, we're looking to make this practice a thing of the past.”