The Internet of Things Makes BlackBerry Ltd. a Buy

Undervalued BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) has the technology and expertise to become one of the biggest software players in the growing Internet of Things.

The Motley Fool

Imagine a world where you always have milk for your cereal because on the way home from work, your car warned you that you were out of milk. Imagine a world where doctors can attempt to diagnose you by having you check your own pulse from thousands of miles away.

While that might sound like it came straight from a book, this is the direction we are headed as a society. The Internet of Things (IoT) is the interconnection of independent computing devices with the Internet. Using the above example, your refrigerator and car would be connected to the Internet and the two would communicate to let you know you needed milk.

BlackBerry to lead the way

BlackBerry Ltd. (TSX: BB)(NASDAQ: BBRY) is so oversold for many reasons, one of which is the fact that it has lost its market share in the consumer smartphone business. At one time, BlackBerry had it all; Apple and Google now control that business.

But there are two things that BlackBerry has always done remarkably well: software and security.

If you are going to share your medical records with your doctor, the last thing you want is for someone to gain access to it. All of this data flowing through the cloud can make for a very precipitous scenario.

If companies were to take BlackBerry’s operating system, QNX, which it bought a couple of years ago, and use that in its devices, these companies would have a very secure system. BlackBerry specializes in security, so this would be an easy leap for the company.

Enter Project Ion

BlackBerry’s Project Ion consists of three parts: a secure public platform built on its QNX operating system, nurturing an Internet of Things environment, and membership into the Industrial Internet Consortium.

Because BlackBerry already has the QNX operating system, it has a step up on the other software companies. And by always keeping that data safe, BlackBerry will continue to grow as a company going forward.

Should you buy?

I say yes. The ability to support big data and keep that data safe is going to be worth a ton of money. Cisco believes there will be 50 billion connected devices by 2020. All of those 50 billion devices are going to have a lot of data going between them. Users are going to need to a good interface to use that data. And most importantly, there are going to be people trying to gain access to that data with malicious intent.

BlackBerry is in the position to offer its software for those connected devices. It can create the interface that consumers will use to look at the data. And it can protect that data while it is being transmitted from point A to point B.

By buying BlackBerry now, you will be setting yourself up for a strong gain in the coming years. BlackBerry may not succeed as a mobile phone manufacturer—though that is still a possibility—but it will succeed at the Big Data world.

In the next few years, BlackBerry is likely to grow. The investment world thinks this is a company with no future and that shows in the price of the stock. But with this move into big data, I feel confident BlackBerry is going to grow.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jacob Donnelly has no position in any stocks mentioned. David Gardner owns shares of Apple, Google (A shares), and Google (C shares). Tom Gardner owns shares of Google (A shares) and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares).

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