At a price-to-sales (P/S) ratio below 10, BlackBerry is still on my watch list.
Led by its AI-powered technology, the tech stock is a leader in the cybersecurity industry, which is one that I am very bullish on over the next decade.
BlackBerry stock might still be on my watch list, but I’ve got a few companies ahead of it. The recent volatility we’ve seen with BlackBerry this year has me looking elsewhere for growth stocks to add to my investment portfolio.
Short-term bearish, long-term bullish
BlackBerry stock was at one point up more than 250% this year. Shares have since dropped significantly and now the tech stock is up 75% since the beginning of 2021.
A massive short-squeeze was one of the key drivers in the surge in price earlier this year. BlackBerry stock was a target of Reddit investors that were looking to take advantage of a heavily shorted company. It seems, though, that the excitement of BlackBerry stock has died down as of late.
I’m bullish long-term on BlackBerry stock, but there’s too much uncertainty for me in the short-term to start a position today. Instead, I’ve got my eye on two other top tech companies that have the potential to be market-beaters for many more years.
Dye & Durham
Since joining the TSX in July 2020, the stock has done almost nothing but going up. Share price growth is now up 200% since becoming a publicly traded company last year.
As of late, though, the tech stock has hit a rough patch. Shares of Dye & Durham are down almost 20% over the past month. At a P/S ratio of 40, shares are far from cheap, but you might not see a pullback like this again anytime soon.
The company operates in an interesting market that it has been able to successfully build a market-leading position in. Its cloud-based software helps its customers automate the process of searching, preparing, and documenting public records. Financial firms, legal institutions, and government organizations are three of the company’s core customer segments.
Similar to Dye & Durham, shares of Kinaxis (TSX:KXS) are certainly not cheap, but they are trading at a discount.
After surging close to 80% in 2020, shares of Kinaxis stock are down almost 25% year to date.
Since the beginning of the year, nothing has fundamentally changed with the company’s business to cause a 25% pullback. The stock has been, unfortunately, hit hard during the sell-off that we’ve seen over the past few weeks in the tech sector.
Even with a 25% drop, though, Kinaxis stock is still up close to 300% over the past five years. Not only that, it trades at a fairly reasonable P/S ratio of 15 today. While that type of valuation might not get any value investors on board, growth investors are used to paying far higher premiums to own a market-beating tech stock.
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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 Nicholas Dobroruka has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry, BlackBerry, and KINAXIS INC.