Turnaround plays are all the rage these days. Picking up stocks that have tanked because of the coronavirus pandemic and riding the wave higher has turned out well for many investors.
The reality is, Canadian software company BlackBerry (TSX:BB)(NYSE:BB) has not performed as well as other rebound plays of late. Despite more than doubling from its 52-week low, shares of BlackBerry have lost more than one-quarter of their value since the beginning of December. However, I’m going to discuss why investors shouldn’t be concerned with the near-term performance of this stock. Rather, I suggest investors focus on these three long-term catalysts that should take this stock higher.
Amazon deal still a go
The multi-year deal BlackBerry inked with technology mega cap giant Amazon.com (NASDAQ:AMZN) in December is still on. This deal is massive for BlackBerry shareholders and could inspire a wave of new investment in 2021.
The deal allows Amazon to access BlackBerry’s IVY platform, providing improved data collection for all the information gathered by vehicle sensors. This platform is built with BlackBerry’s QNX platform fully integrated, allowing BlackBerry to offer a suite of software solutions to companies like Amazon. This could mean future partnerships may be on the horizon for BlackBerry. Should such partnerships materialize, we could see another spike in this company’s stock price.
Safety and cybersecurity are going to be more important than ever
BlackBerry’s track record as a company with a laser-like focus on cybersecurity is going to be key for this stock’s success long term. The company’s QNX platform, as well as its IVY platform, will propel this company forward over time. John Chen, BlackBerry’s CEO, has completely shifted the company’s strategic direction toward software solutions focused on cybersecurity. I see this secular growth trend as the key investment thesis for this stock as a long-term growth play.
Secular trends pandemic resistant
The trends supporting the company’s software platforms are relatively immune to the effects of the coronavirus pandemic. Near-term headwinds related to the pandemic were tied to expectations of a slowdown in automobile production. Additionally, a slower-than-expected adoption of BlackBerry’s software by automakers has soured sentiment for this company somewhat.
That said, markets have since shifted overall sentiment to a much more optimistic and bullish stance. I expect continued growth in the EV segment and this partnership with Amazon to drive BlackBerry’s share price higher. Growth investors ought to take notice. Picking up shares on dips like the one we saw these past few weeks is a great idea.
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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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Chris MacDonald has no position in any of the stocks mentioned. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.