It’s been an incredible year for investors, and I don’t mean in a good way. After reaching all-time highs across the board, markets around the world dropped back in March. Since then, the market has pretty much jumped back to where it was before the crash. That is, until recently.
Hopes of a V-shaped recovery were dashed in the last month or so when the markets started falling yet again. After gaining about 50% from the drop in March, the TSX Composite has started to drop once more. In the last month, shares have come down about 5%. While that may not seem like much now, it could only be the beginning of yet another market crash.
So, what should you do? Prepare. Learn from the last market crash and look into stocks that have and will continue to fare well in this new marketplace. Tech stocks in particular have been going strong thanks to the work-from-home economy. If there’s one stock you should consider as the world continues to change, it has to be BlackBerry (TSX:BB)(NYSE:BB).
Change has come
BlackBerry stock has moved pretty far away from its origins as a smartphone producer. After reaching all-time highs almost a decade ago, the stock has sunk from triple to single-digit stock prices. But today, this stock’s move into the cybersecurity sector is pretty much paying for itself.
BlackBerry made the transition, as it had already figured out cybersecurity for its smartphones. It then acquired QNX, a real-time software security system that doesn’t need to be reformatted. That’s huge, as the company can basically sit back and keep selling it with minimal changes. The software is now in over $175 million vehicles worldwide.
On top of this, the company has focused in on cybersecurity in the workplace. This is where today’s investor can be super excited. The work-from-home economy has grown practically over night. Businesses big and small need to keep data safe, and that’s where BlackBerry stock comes in.
Is it working?
The numbers speak for themselves. After all this investment, the company was already seeing a strong increase in revenue. But as more and more businesses needed employees working from home, the company has seen revenue skyrocket. While other industry revenue has fallen, BlackBerry stock saw a 6.5% increase in revenue year over year during the last quarter. While in August of 2018 the company still worked at a loss in leveraged cash flow, today that leveraged cash flow is at $188.9 million.
With earnings coming out again on September 24, investors should think about adding this company to their portfolios pretty quickly. In the next year, the company should soar out of the current economic crisis well ahead of the pack. By the 2022 earnings year, earnings per year could see a year-over-year increase of 75.4%, with sales reaching $1.1 billion.
BlackBerry stock continues to be beaten down, and I don’t think it’s necessary. As earnings reports come out stronger and stronger, it’s clear that investors will start catching on. Now is the best time to buy, while the stock is cheap and during an economic crisis that puts it at bargain-basement prices. If you have $1,000, this is definitely the stock you want to buy.
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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry and BlackBerry.