There aren’t as many stocks trading below book value as there were only a short while ago. After the initial COVID-19 market crash in March, we have witnessed an impressive rebound.
But that doesn’t mean that there aren’t great opportunities out there: they are just harder to find. If you’re looking for significant returns to grow your portfolio, consider buying BlackBerry Inc. (TSX:BB)(NYSE:BB) stock.
BlackBerry stock recently went from trading significantly below book value to trading at 1.2 times book value. The stock rose 70% in two short months. But this rise is not over.
Here’s BlackBerry stock is still a good buy for explosive long-term gains.
Long-term cybersecurity growth could send BlackBerry stock skyrocketing
BlackBerry is a tech company involved in the cybersecurity business. As such, BlackBerry stock will benefit greatly from where the world is heading. In this pandemic, the digitization of every facet of life has been accelerating at lightspeed — and with this comes the need for security.
Enter BlackBerry, whose cybersecurity offering has big potential today. Unified Endpoint Management (UEM) and Unified Endpoint Security (UES) systems are growth areas. Increasing remote work and business continuity needs is driving demand for these systems. Security is a must and maintaining productivity is essential.
In the quarter ended March 31, Blackberry posted very healthy fourth quarter billings growth, setting the company up for a strong year. Economies are reopening, and remote work and business continuity plans are essential in the new normal. Cybersecurity will be an essential part of the new normal.
BlackBerry stock will benefit from the trend toward connected cars
Autonomous cars are at least a decade away. But in the meantime, cars are quickly becoming increasingly equipped with BlackBerry’s technology. BlackBerry QNX is at the forefront of transforming automobiles into connected systems today and autonomous vehicles tomorrow.
BlackBerry’s software has long been used for infotainment systems, acoustics, and dashboard functions. The company has added substantially to its expertise. More advanced technologies such as Advanced Driver Assistance Systems are growing rapidly.
These systems are designed to enhance driver performance. They automate functions, give warnings and intervene when necessary.
BlackBerry’s stock price fell significantly in March as the coronavirus shutdown significantly impacted everything, including auto sales. But now economies are beginning to open up and investors are beginning to price-in a recovery.
While the road to recovery will not be a straight line, investing in stocks that are involved in the industries of the future is a good bet.
BlackBerry stock is one such stock. And this is by design. When CEO John Chen took over a few years ago, he embarked on an ambitious plan. He exited the handheld phone business and focused on automating cars and cybersecurity. These are secular growth industries of the future.
With a strong balance sheet and exposure to these high-growth industries, BlackBerry stock price has good potential going forward.
Foolish bottom line
BlackBerry stock has come a long way since the days of it being a handheld phone maker. The company is transforming the automotive industry one step at a time, leading the way to a digital future with its cybersecurity systems.
BlackBerry stock still trades at an attractive valuation (only slightly higher than book value). It is on the cusp of breaking out as these industries grow at an accelerated pace as we exit the coronavirus lockdowns.
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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 Karen Thomas has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry and BlackBerry.