Let me tell you a story about cunning, huge growth and a market that could be bigger than China. On the way, you’ll find the best tech stock I know — and it’s so cheap, it’s crazy.
Smartphones sales are on fire. In the last decade, these souped-up handsets have reshaped how we communicate. But BlackBerry Ltd (TSX: BB)(NASDAQ: BBRY), which started this sea change years ago, has been kicked out of the market.
That’s why the stock gets less respect than Mr. Bean’s dog. Over the past five years, the former tech giant has lost 87% of its value. As you can see in the chart below, it has badly lagged its peers.
|
Company |
5-Year Price Change |
Market Capitalization |
Trailing P/E Ratio |
|---|---|---|---|
|
BlackBerry Ltd. |
(87%) |
$5B |
N/A |
|
Apple Inc. |
271% |
$604B |
16 |
|
Google Inc. |
118% |
$391B |
28 |
|
Microsoft |
79% |
$385B |
17 |
Source: Google Finance.
Now this sounds odd. But not one of these companies can match the upside I see in BlackBerry. Let me show you three things Mr. Market missed when it comes to this stock:
1. Mr. Market forgot about value
The price of any stock must account for growth. Hold this thought. We’ll get to that in a bit. But right now, BlackBerry is priced at scrap.
Today, BlackBerry has a market value of $5.4 billion. At that price, you’re only paying for its cash, patents, and service business. You can get all the upside from QNX, BlackBerry Messenger, and the Passport phone for free.
2. Mr. Market forgot about size
Today, 99% of all “things” are unconnected to the Web. But soon, almost all of your stuff — including your car, TV, and coffeemaker — will be online. Cisco Systems, Inc CEO John Chambers predicts that this Internet of Things could be a US$19 trillion market by 2020.
BlackBerry could be a key player in this new field. Simply put, it wants to be the nervous system for the IoT. It is building the framework needed for all of these devices to talk to one another. And given its reputation for security, BlackBerry is well positioned to seize this new market.
3. Mr. Market forgot about the smart money
I’m not the only one who likes this stock. The world’s smartest investors are also bullish. Billionaire D.E. Shaw bought a US$46 million stake. A number of other stock sharks — such as Spencer Waxman, Irving Kahn, and Nelson Obus — are also buying up shares.
There’s so much more to this story — QNX, BBM, the new phone. Don’t let the iSheep scare you out of this stock. This could be the top name in 2015 and beyond.
