The Christmas gifts are open, the eggnog is gone, and now we have to look forward to 2015 and what investments we want to make to maximize our returns. One company that I believe will is going to return plenty of money to its investors in 2015 is BlackBerry Ltd. (TSX: BB)(Nasdaq: BBRY).
It’s amazing that only a couple years ago — even a couple quarters ago — people were saying that BlackBerry was doomed and that it was going to fail. It had lost the smartphone war with other competitors and everyone was convinced it would fail.
But that’s just not the case. BlackBerry is the gift that just keeps on giving.
What’s working?
BlackBerry finally posted a small profit this past quarter and showed a positive cash flow of $43 million. While revenue has dropped, this move is proof that CEO John Chen’s strategy is working. Further, it is a psychological victory where the company can now say that it is adding to its war chest rather than decreasing it.
Instead of trying to war with the big companies, Chen has the company focusing on enterprise software and hardware. And that has always been what investors believed the company should do. When I first started tracking BlackBerry as an investment, I argued that it needed to focus on what it was good at.
BlackBerry’s strategy
The trick for the company is going to be continuing to put out high quality devices like the Passport and Classic and focusing in on its niche audience. Those two devices are the perfect phones for people to work with, which is what BlackBerry needs to focus on. When I think of BlackBerry, I think of executives, hard working people, and people that need secure devices.
The recent partnerships with Samsung and Boeing Co are perfect examples of BlackBerry focusing in on that niche. Boeing is going to use BlackBerry’s BES 12 to power the security on one of its new “secret” phones. Samsung is using BlackBerry to power the security end-to-end in its Android devices.
Then there is Ford Motor Co. BlackBerry’s QNX software will be powering the in vehicle computers for these cars, replacing the Windows operating system. This is the first step for BlackBerry to break into the Internet of Things world.
Should you buy?
BlackBerry has had a recent run up from $10.65 to $12.41 one the fear of lower revenue in the earnings disappeared. I think the stock is valuable at both of those prices, but you might want to wait to see if the $12.41 range is the new support for the company. However, if you’re looking at BlackBerry into 2015 and even 2016, whether the price is $10.65 or $12.41, I think it is a great buy and you should look into adding it to your portfolio.
If you’re looking for other companies to add to your portfolio, you should look at this report we put together. It’s got a ton of really great ideas in it.
