There are hardly many Canadian tech stocks that have been as underappreciated in the last few years as BlackBerry (TSX:BB)(NYSE:BB), in my opinion. Many investors don’t even try to understand why this company is still worth investing in years after it exited the smartphone business. On the TSX, BB stock is currently trading at $12.02 per share after losing nearly 11% in the last three years. In this article, I’ll explain why I find its stock a screaming buy at its current market price. But before that, let’s review how its stock has fared this year so far and why.
BlackBerry stock caught everyone’s attention in January 2021, when some retail traders from the infamous subreddit WallStreetBets triggered a buying spree. This Reddit trading mania led to a 130% appreciation in BB’s stock price in the year’s first month.
Nonetheless, the unity of these retail traders seemingly didn’t last for long, as the stock started erasing most of its gains in the following months. After surging to $17.96 per share at the end of January, its stock tanked to $10.54 per share by the end of March 2021.
Since then, BlackBerry investors have been going through a bumpy roller-coaster ride each month. After surging by 22% in June, BB stock lost 16% of its value in July. Similarly, it has shed 16% in September so far after rising by 13% last month.
The key issues right now
While BlackBerry stock’s astonishing gains in January caught most investors’ eyes, these gains also heightened the volatility of the stock to the extent that most conservative investors started avoiding it. Most traders wondered what would happen if they bought it today and the stock had another big selloff tomorrow.
I wouldn’t question their judgment as the stock has truly been extremely volatile lately. But when you expect to make big money in the long term, you might have to avoid short-term market noise. This is one of the popular investing principles that even the legendary investor Warren Buffett agrees with.
Key positive long-term factors
In the last few years, BlackBerry has emerged as one of the major tech solutions providers to the global automotive industry. Its advanced QNX operating system and expertise in cybersecurity have led to this accomplishment. Its technology is used in nearly 200 million vehicles across the globe today.
The company is now accelerating its efforts to become one of the leaders in the autonomous and electric vehicle technology segment. Its intelligent vehicle data platform called BlackBerry IVY will allow car companies to collect real-time data from their vehicles and utilize it to provide better features and functionality. To speed up its automotive technology efforts, BB also has partnered with tech giants like Amazon Web Services and Baidu.
BB stock could explode
While the trend in BlackBerry’s recent financials might not have been very impressive, its long-term fundamental outlook looks really strong. According to its CEO John Chen, BB currently has “…design wins with 23 of the world top 25 electric vehicle OEMs.” That’s another reason why I expect the company to hugely benefit from the upcoming electric and self-driving car revolution, which could help its financials grow at a much faster pace than most analysts expect.
As a result of the recent market-wide selloff and weakness in the Canadian tech space, BB stock has lost 21% of its value in the third quarter so far. The recent drop has made this cheap Canadian growth stock even more attractive for long-term investors. I expect BB stock to explode anytime soon.