Many traders would be surprised to hear that BlackBerry (TSX:BB)(NYSE:BB) stock is priming itself for a comeback on the Toronto Stock Exchange. Many experienced analysts had given up this stock as dead until recently.
BlackBerry had manufactured one of the most popular and versatile cellphones in the early 2000s. With the advent of the iPhone, Blackberry quickly lost popularity.
BlackBerry stock experienced sympathy gains in 2008 when the iPhone became popular, soaring above $100 per share.
This peak in stock price rapidly dissipated after it became clear that BlackBerry would not be able to compete with Apple (NYSE:AAPL) for smartphone market share.
Today, BlackBerry stock sells for $6.71 per share at writing. The company is still alive, and has been pivoting its business development strategy into the Internet of Things (IoT), cybersecurity, and artificial intelligence.
Transition to IoT
IoT is the contemporary technology movement similar to the industrial revolution. IoT encompasses data transfer automation to change the way we manufacture, protect, and ship goods and services globally.
Data protection will be even more advanced as we integrate artificial intelligence into cybersecurity software.
One of BlackBerry’s most recent achievements is CylancePROTECT for mobile devices. BlackBerry has expanded its popular cybersecurity software to leverage Cylance’s artificial intelligence technology to protect against mobile threats.
BlackBerry estimates that mobile malware attacks have risen by 50% in the past year.
BlackBerry doesn’t just sell out-of-the-box solutions. Its cybersecurity technology is available on the AWS and Azure Marketplaces.
The expansion in software availability means that they have top-of-the-line access to premium cybersecurity consumers – small- to medium-sized businesses.
BlackBerry stock hitting bottom
BlackBerry stock is likely hitting a bottom. The price on BlackBerry shares has declined from $12.20 to $6.71 in the past six months, an almost 50% drop.
Until now, investors have struggled to have faith in its current business strategy – but the company is undoubtedly reaching a turning point.
Heading into 2020, many of the strategic moves the company has made in the past year to increase the availability and reputation of its cybersecurity software will start to pay off, and BlackBerry’s financial and quarterly earnings data should begin to rise.
The rise in earnings will undoubtedly accompany an increase in the stock price.
No dividend downside
The only downside to an investment in the underpriced BlackBerry stock is the non-existent dividend payout. BlackBerry doesn’t issue dividends to shareholders, which means that Canadian investors will be investing their money at a 0% interest rate.
Canadian investors have many less risky options on the TSX than BlackBerry. Banking stocks, for example, are likely to give Canadians more security in their initial investment along with higher dividend payments than BlackBerry.
While bank stocks may give aspiring retirees higher returns for less risk, it’s essential to remember to build a diversified portfolio. Your Tax-Free Savings Account (TFSA) and Registered-Retirement Savings Plan (RRSP) can’t consist of solely banking stocks. Technology stocks are a must-have for every Canadian retirement portfolio.
As far as technology stocks go, BlackBerry is a great option. BlackBerry is increasingly gaining additional shareholder attention on the TSX. Trading volume on the stock has reached as high as nine million shares in one day in the past six months.
Canadian investors should take a close look at this stock. A 100-share investment would only cost $675 at the time of writing.
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 Debra Ray has no position in any of the stocks mentioned. The Motley Fool owns shares of BlackBerry. BlackBerry is a recommendation of Stock Advisor Canada.