The COVID-19 pandemic led to a downturn in major industries. Automobile sales had surged to near-record levels in the lead up to 2020. However, the pandemic saw sales dip. Meanwhile, cinemas were forced to shut their doors for months on end. BlackBerry (TSX:BB)(NYSE:BB) and Cineplex (TSX:CGX) are two Canadian staples that have been impacted during this crisis. Which stock is the better buy today? Let’s jump in.
Where is BlackBerry headed in the second half of 2021?
BlackBerry stock has climbed 84% in 2021 as of late morning trading on June 28. Its shares are up 138% from the previous year. Back in April, I’d discussed whether the Waterloo-based tech firm was the best cybersecurity stock available on the TSX.
The company became a household name as it took the lead in the fledgling smartphone market in the mid-to-late 2000s. Unfortunately, its run at the top did not last. Competition from the Apple iPhone and Android competitors brought BlackBerry to its knees in the hardware space. In response, it made the shift to focus on software in the 2010s.
This transformation has been successful. BlackBerry has managed to establish a strong footprint in the global cybersecurity and automobile software spaces. In fiscal 2021, BlackBerry QNX scored design wins in 23 of the world’s top 25 Electric Vehicle OEMs.
Meanwhile, it introduced BlackBerry Alert Next-Gen Critical Event Management for the commercial sector. The cybersecurity and automotive software spaces are both geared up for strong growth going forward.
Here’s how Cineplex can continue its comeback this year
Cineplex is Canada’s largest movie theatre operator. It was forced to close its doors to customers in March 2020, as the severity of the pandemic first became apparent in Canada. This shift saw revenues dry up, and the company was forced to find creative solutions to stay
Shares of Cineplex have climbed 71% in 2021. The stock is up 50% from the prior year. Earlier this month, I’d discussed why Cineplex and AMC were on a tear. The United States has enjoyed an efficient reopening on the back of an impressive vaccine rollout.
Canada has lagged behind its southern neighbour, but it started to catch up in the late spring. Ontario is set to enter step two of its reopening process on Wednesday, June 30. Unfortunately, indoor cinemas will only be allowed to reopen by step three.
Still, Cineplex is well-positioned to take advantage of a promising film slate this summer. Consumers are hungry for any form of entertainment. There are still restrictions on travel and other activities, which could bring about a renaissance for the movie theatre. Streaming service subscriber growth has slowed for companies like Netflix, which may indicate some consumer fatigue in this space.
Which is the better buy?
BlackBerry and Cineplex have both had a hot start in 2021. Cineplex is in a good position to see its bottom line improve as movie theatres reopen this summer.
However, I’m more inclined to snatch up BlackBerry as it progresses in fast-growing industries like cybersecurity and automotive software. The cinema was in decline before the pandemic hit. It has a lot to prove after this crisis.
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 Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple and Netflix. The Motley Fool recommends BlackBerry and CINEPLEX INC. and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.