Stockchase Opinions

Martin Hubbes, CFA BlackBerry BB-T TOP PICK Jul 05, 2010

(A Top Pick Oct 22/09. Down 24%.) Stock getting cheaper even though they are still growing. Sold over 10 million phones last quarter. Ridiculously cheap at 10X earnings. Huge cash generator. Solid management.
$51.690

Stock price when the opinion was issued

electrical electronic
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DON'T BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

BB is slowly becoming irrelevant. It hasn't made money since 2015, and its large cash balance is gone. Cash flow was negative $263M last year. Sales continue to decline, and it missed its sales estimate last quarter. BlackBerry's sales should remain volatile as it separates its Cybersecurity unit from its higher-growth Internet of Things (IoT) segment, with disruption likely to result. Revenue may expand at an average annual rate of 3.1% in fiscal 2024-27, based on estimates. The higher growth potential of IoT vs. the Cybersecurity unit could prompt a spinoff of the former, allowing investors to tap IoT's sales growth exclusively. High-margin licensing fees have fallen to an annual run rate of about $20 million following the sale of most of the patent portfolio. The resulting margin pressure is likely to abate as QNX and other profitable new offerings pick up. Overall, while its technology may still have promise, it has over the past decade destroyed shareholder value, with management changes adding more uncertainty. It is vey hard to endorse. 
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HOLD

Treat it as a lottery ticket. Don't add to it if you own it. He could see it going north of $5 over the next 12 months. Tricky situation they got themselves into.

(Analysts’ price target is $9.70)
SELL

Very weak chart, so dollar-cost averaging won't work. Structurally declining for over a decade. Even Prem Watsa threw in the towel. Broken. Probably goes to $0, question is not if but when. Sell.

RISKY

Like a lottery ticket. Talk of splitting up the company. Who knows where the bottom is, but you could write a put lower or buy a call higher.

WEAK BUY

Shares have fallen to what their patents and technology are worth. It won't go out of out of business; there remains demand for their technology. it could be a meme stock again.

WATCH

Seems to be better managed now. Focus on software in autonomous and electric vehicles. On top of that, number of lucrative partnerships around the world. Interesting, doesn't own, but is getting close. Doesn't think it will be a double from here.

(Analysts’ price target is $7.00)
DON'T BUY

If you want to be in tech, you're looking for more growth than this provides. Not a robust revenue pipeline. A lot better companies out there such as NVDA. See his Top Picks.

WAIT

For this one, he's looking at the very right side of a 1-year chart. You can see the basing, but what you want to see is a breakout. Could be a swing trade, but doesn't really have enough movement to do that. Could go sideways forever, or break to the downside. Don't buy until you see that breakout.

His book Sideways goes into this strategy in detail.

PARTIAL SELL

It popped recently, but it's not a good chart. Trim in tax-loss selling, if you hold.

DON'T BUY

They provide back-end software in hundreds of millions of cars, plus they have a strong cybersecurity business. They aren't growing that quickly. Trading at 30x PE. Still not super cheap.