BlackBerry (TSX:BB)(NYSE:BB) stock may be the Reddit stock with the most promising turnaround potential. However, after surging over 67% in a month, long-term thinkers may wish to take a raincheck on a name that could be headed back to $10 should the latest meme stock rally run out of steam.
Today, BlackBerry stock is hovering at $16 and change, right in the middle of its past-year trading range. While I wouldn’t bet against the fearless retail investors at Reddit’s WallStreetBets, I most certainly wouldn’t want to go long here, unless, of course, you’re a seasoned trader who’s looking to get in on the meme stock action.
In this piece, we’ll weigh two hot Canadian stocks in BlackBerry and Score Media and Gaming (TSX:SCR)(NASDAQ:SCR) (theScore) that have been a trader’s playground of late. We’ll have a look at each name through the viewpoint of a long-term investor and a trader to see if either high-risk, high-reward play is worth putting money on.
Reddit’s favourite Canadian stock is at a crossroads right now, with shares stalling out hand in hand with the likes of fellow meme stock AMC Entertainment. Will the next stop be up, down, or sideways? That’s the million-dollar question, and while it may seem foolproof (that’s a lower-case f, folks!) to buy short-dated put options against BlackBerry or any other meme stock, I’d caution investors from underestimating the staying power of the retail crowd as we head into a thinly traded summer.
Undoubtedly, if there’s a time for the retail army at Reddit to make their mark, it’s during the summertime, as the hedge funds head to the Hamptons.
While I’m not against speculating on a continued rally in BlackBerry stock over the near term, I would only do so if you’ve got an exit plan and aren’t inclined to give into the comradery over at WallStreetBets. The Reddit culture praises diamond-hands (strong hands that hold in spite of volatility) and shames paper hands. Ultimately, it’ll be paper hands who throw in the towel before the stock crumbles like a paper bag that will be the ones to make any money from the trade.
So, do have an exit plan and book your profits when the time comes, because, like it or not, somebody will be left holding the bag at the end of the day once the fundamentals matter again and the market price returns to a level that better reflects the company’s intrinsic value.
My takeaway on BlackBerry stock? Long-term investors, hold off. Traders, feel free to jump in, but be ready to jump out when the time comes; just because volatility has calmed in recent weeks does not mean an explosive move will not be in the cards sometime soon.
theScore stock is another wildly volatile stock that’s fresh off a 70% pullback. Shares have since bounced back modestly until Wednesday, when the stock rapidly corrected 11% in a single trading session. Undoubtedly, theScore trades like an option on the passage of Bill C-218. The bill would legalize single-game sports bets and open the floodgates for theScore, which is ready to go, with an incredible platform that could really find a spot with sports fans.
Moreover, I’d pin theScore stock as an attractive takeover target. Indeed, many contingent events could propel theScore “to the moon,” and I think the name exhibits many traits of the names on WallStreetBets’s radar.
I don’t think Reddit will start piling into theScore stock anytime soon, but the name has had a small number of postings on the forum. Whether or not the multi-bagger idea will pick up traction will be anyone’s guess. Regardless, I think theScore stock is a compelling nibble for long-term investors and traders alike.
If the right cards fall into place, the stock could be a multi-bagger. Place your bets!
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.