5 Reasons to Buy BlackBerry Ltd. Right Now

Here’s why value investors should consider investing in BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) right now.

| More on:
The Motley Fool

There’s no doubt that BlackBerry Ltd. (TSX: BB)(NASDAQ: BBRY) has had a tough run. The shares are down 86% in the past five years and the company nearly found itself in penny-stock territory late last year.

Today, value investors are deciding whether or not BlackBerry is still teetering on the edge or has stabilized and is ready to reward shareholders significantly over the next several years.

Here are five reasons I think value investors should consider adding a small BlackBerry position to their portfolios.

1. John Chen

BlackBerry’s new CEO, John Chen, is one reason investors are feeling better about the company’s prospects. Since Chen took over, the company has shifted away from trying to be all things mobile to all people, and is focused on leveraging its core strength — secure and reliable communication solutions for business people.

Chen himself gave the company a 50-50 chance of survival shortly after he first took the helm late last year. Today, he is much more confident about BlackBerry’s prospects.

As a well-regarded tech turnaround expert, Chen has begun to convince the market that he will succeed. More importantly, he has instilled a renewed sense of confidence in his employees, and that carries incredible value going forward.

2. Movirtu

The recent acquisition of Movirtu is a great example of BlackBerry’s renewed focus on the business customer. Movirtu is a SIM developer and has created a product that allows a single BlackBerry device to have multiple active accounts, allowing employees to keep personal use and business use separate.

Small businesses can’t afford to cover personal-use data, voice, and messaging charges for their employees, but they also don’t want to require their employees to use their personal devices for work.

The new technology will allow BlackBerry’s enterprise customers to create two profiles on the same phone. The employee can then easily toggle between the two and the company can control what services are available on the company-side of the account.

The Movirtu deal is a good example of why the market is starting to feel better about BlackBerry’s prospects.

3. New Passport

Keeping with its focus on making life easier and secure for business people, the new Passport device should resonate well with niche markets in the enterprise community. The large 4.5-inch square screen and three-row keyboard coupled with BlackBerry’s security features should be popular with a wide variety of corporate and small-business users and help BlackBerry differentiate itself from heavy competition in the smartphone market.

4. Lean corporate structure

BlackBerry cut 60% of its employees and shifted manufacturing of its smart phones to Foxconn. The scaled-down size means the company only has to sell about 10 million devices annually to be profitable. With the launch of the much-anticipated Passport and the success of the new Z3, BlackBerry is on the right track.

5. The Internet of Things (IoT)

The idea that everyday devices can constantly send and receive data over the Internet, non-stop, 24/7 is exciting and very scary from a security point of view. This is why BlackBerry’s security expertise could give it a huge advantage if IoT actually takes off.

The bottom line

Competitive threats still loom large for BlackBerry but the company appears to be on the right path. It probably won’t reach the stratospheric valuations it once enjoyed, but for new investors, it just has to grow at a reasonable rate.

BlackBerry’s latest earnings come out in the next few days. An earnings beat or revision upward of guidance could send the shares a lot higher.

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 Andrew Walker has no position in any stocks mentioned.

More on Tech Stocks

question marks written reminders tickets
Tech Stocks

Nvidia’s Historic Stock Split: Will Investors See Bigger Gains?

Nvidia's (NASDAQ:NVDA) record 10:1 stock split entices many investors in several important ways. But some myths aren't technically correct.

Read more »

A worker drinks out of a mug in an office.
Tech Stocks

Want $1 Million in Retirement? 3 Stocks to Buy Now and Hold for Decades

Growth stocks such as Docebo and Celsius Holdings should help you generate outsized gains in the upcoming decade.

Read more »

Male IT Specialist Holds Laptop and Discusses Work with Female Server Technician. They're Standing in Data Center, Rack Server Cabinet with Cloud Server Icon and Visualization
Tech Stocks

Missed Out on NVIDIA? My Best Growth Stock Pick to Buy and Hold

A TSX growth stock is a top pick and profitable investment choice if you missed out on the ascent of…

Read more »

grow dividends
Tech Stocks

3 Tech Stocks That Could Make You a Millionaire

Given their long-term growth potential, these three tech stocks could deliver oversized returns in the long run.

Read more »

Businessman holding AI cloud
Tech Stocks

Ready to Invest in Artificial Intelligence (AI)? 2 Stocks That Are Solid Bets

These two AI stocks provide investors with strong future opportunities as AI continues to become a part of our everyday…

Read more »

Dice engraved with the words buy and sell
Tech Stocks

Is Lightspeed Stock a Buy, Sell, or Hold?

Down 88% from all-time highs, is Lightspeed stock a good buy in May 2024 and can the TSX tech stock…

Read more »

Overhead shot of young adults using technology at a table
Tech Stocks

Forget NVIDIA: 1 Tech Stock to Buy Instead

Here’s why Shopify (TSX:SHOP) stock could be a smart long-term buy for investors willing to look beyond NVIDIA’s impressive growth.

Read more »

Lights glow in a cityscape at night.
Tech Stocks

2 Artificial Intelligence Stocks to Buy and Hold for the Next Decade

Qualcomm (NASDAQ:QCOM) and another well-placed AI stock could drive substantial capital gains over the next decade. Here's how.

Read more »