BlackBerry (BB.TO)

This definitely has a base in the $8 range, but looks like it is struggling mightily to stay above that right now, and looks like it might head down to that area again. To him, it is a trading stock. You buy it somewhere near the support level, and probably end up selling it in the low $11 area.

John Chen moved the needle a little bit. It hit a low of about $8 this year and reached about $9.50. There is some support at around $9.10. It looks pretty good. The chart shows a downtrend, and the stock is trying to break through that.

They released numbers this week. The revenue was weak. The turnaround portion is done and now they will look at growth. He has confidence in management. Once you turn around a big company the analysts are all over it and the stock price can move up quickly. It is Canadian. (Analysts’ Target: $10.25).

This is in a major transition. They have gone from being a hardware company, trying to be a software company and still not earnings positive yet. These transformations can take years. The autonomous vehicle sector is going to be an extremely competitive field going forward. Whether this ends up being one of the dominant players is going to be a guessing game at this point. Not sure he would consider this as an investment, because you can’t analyse what is going to happen going forward. It is more speculation.

Feels this is still pretty speculative in terms of their transition from hardware to software. They are not making any money. There is a very little visibility as to what this company is going to look like a couple of years out.

It is a small short for him. They no longer produce handsets. They have a patent portfolio and cash. Competitors aren’t buying them out, but just hire their best employees away from them.

Tech tends to do well from October into December and often into January. We have seen an uptick. It looks in pretty good shape. Not a bad place to buy but not a long term hold.

He has a couple of clients who insist on owning this, but it is not something he would recommend. Thinks management has slimmed-down. They had some very smart people. By surviving and changing its emphasis to software, it is interesting, but doesn’t see it racing up at any particular point in time. They have to come in with a couple of good quarters to show that the strategy is working.

Tried to get back into the smart phone business, but like others in the industry, it is no more. Thinks the current management is going to have to show that the software, technology is going to drive their growth. This is a “wait and see” situation.

He likes to buy stocks that are emerging from a consolidation or in an uptrend. This one is doing neither. You have flat highs and descending lows. Wait and see if it breaks out.

Given its risk profile, this is not something that would make it into his conservative portfolio. This is kind of at a fork in the road. Will they spinoff the hardware division? He doesn’t think they will part ways with the hardware. The losses in that space have subsided over the last year. This is too much of a bet on a turnaround.

(Market Call Minute.) Thinks it has a lot of upside and likes what John Chen is doing, but to turn around a big ship like this takes time.

CEO is very well remunerated at $89 million. However, it is not entirely all recurring compensation. He earns about $3 million a year, but when he joined the company, he got a very lumpy one time signing bonus, which was comprised of a lot of restricted stock. It remains to be seen whether he will meet the performance criteria, and actually realize on that, because it is tied to whether the shares outperform the NASDAQ, which has not been happening. Buying “value plays” in technology is a tough way to make money. Incentives motivate behaviour, and looking at the conditions attached to John Chen’s pay packet, the 3-year anniversary date is mid-November, so if you own the stock he would stick around to see what comes up between now and the anniversary date.

He still likes it. No one has come close to touching the quality of their network. It is hard to be anything else but patient and positive. The software is going gangbusters. He does not know what they are doing messing around with phones. There are elements of the company that are worth a lot.

A tough case, because at first it was a good gadget maker, but has now fallen behind the iPhones and Android’s, and is now trying to reinvent itself. It needs a catalyst to move it higher or lower, but there is a lot of uncertainty about its prospect.