There are always incredible growth stocks, like BlackBerry (TSX:BB)(NYSE:BB), on the TSX Index to take advantage of, even in today’s frothy stock market. While market valuations have become a tad stretched thanks to the excess liquidity pumped into the economy, I think we’re on the cusp of one of the greatest discretionary spending booms in history.
With the vaccine rollout continuing on, the great reopening of late 2021 could have the potential to be profound. Add all the stimulus and extremely dovish central banks into the equation, and all signs look to be green. That said, the market is forward-looking, and right now, I think the big boom is mostly baked in.
In this piece, we’ll have a closer look at BlackBerry stock, which finds itself crawling out of a ridiculously volatile first quarter of 2021.
BlackBerry: To the moon and back again
BlackBerry, the transforming software company that few investors understand, is fresh off a nasty 66% plunge.
The folks at WallStreetBets drove the name into the moon, and now shares have crashed back to Earth, making it a great buy for those who understand the magnitude of BlackBerry’s latest endeavours. Of late, BlackBerry investors have soured over the patent sales, which will surely cause sales pressures moving forward. With such sales likely more than baked in, though, I think investors are losing sight of what matters most with the name: actual fundamentals.
The company has been hurt by the pandemic, and the QNX business took a hit. The company had a very modest recovery that’s not yet anything to write home about. As we return to normal and chip shortages are alleviated, QNX will be looking up again, especially with all the discretionary spending that could cause a massive auto boom.
Add BlackBerry’s vehicle data project IVY into the equation, and I think BlackBerry is a great buy on this latest dip. I think the sell-off has overswung to the downside, opening up a great opportunity for patient and venturesome Canadian investors who are willing to take short-term pain for a shot at a tremendous long-term gain.
Foolish takeaway on BB stock
BlackBerry stock has soured again. Some people are throwing in the towel because of the negative momentum and the latest disappointing quarterly results. I think that’s a mistake. And if you’re a long-term thinker, you should look to accumulate shares on this latest dip. I’d buy half a position in BB stock here and half after it pulls back into single-digit territory.
For now, analysts are against buying the name, but I think they’re wrong. Sure, BlackBerry is a name that could take years to bring forth meaningful organic growth that the Street is calling for. And hanging onto a name that drags its feet for years will leave one at risk of severely underperforming the market. That said, I think investors need to have faith in BlackBerry CEO John Chen. I think the man can pull off what could become the greatest turnaround story of the 2020s.
I think BlackBerry stock will boom again. When it’ll happen, nobody knows. In any case, I think it’s a good idea to punch your ticket here, now that most others have moved on. BlackBerry stock looks to me like a name you’ll want to hold for the long term rather than a trade to make yourself a quick buck.
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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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry and BlackBerry.