The Internet of Things (IoT) industry is set for skyrocketing growth over the coming years, and many companies are emerging to ride the latest wave of the internet revolution. Sierra Wireless (TSX:SW)(NASDAQ:SWIR), the Vancouver-based maker of intelligent modules, modems, cloud-based services, and more, is one of the top contenders in the market.

Here are the strengths, weaknesses, opportunities, and threats that you need to know to decide whether Sierra Wireless is worth looking at.

Strengths:

• Early stake in the growing Internet of Things market.

The Internet of Things is a nascent industry with the predicted potential of very high growth in the near future. According to Gartner, a technology research company, by 2020 over 25 billion “things” (thermostats, cars, and even that Blu-Ray DVD player that is slowly collecting dust while you stream movies over Netflix) will wirelessly communicate with one another. This is a whopping 500% increase in the current 2015 figure of 4.9 billion “things” connected to each other.

With booming growth just around the corner for the industry, Sierra Wireless hopes to be a big player in the industry’s imminent eruption.

• Sierra Wireless holds the top spot in machine-to-machine market share.

On its website, Sierra Wireless proudly boasted a number one position in the global market of machine-to-machine (M2M) communication devices. Its solid 34% market share and slew of high profile customers and partners–including Cisco, GE, Philips, Honeywell, and more–are nothing to sneeze at. But, in a growth industry such as IoT, bigger, more established firms may soon shoulder their way into Sierra Wireless’ fragile dominant position.

Weaknesses:

• Despite healthy revenue growth, Sierra’s earnings-per-share (EPS) ratio keeps falling.

In the first quarter of 2015, Sierra Wireless’ revenue grew to $158 million, a 21% increase from the same quarter of the previous year. Despite this pleasing figure, the company’s EPS, or the amount of net profit that a single share is worth, was only CA$0.12.

While this number is an improvement from last quarter’s EPS of negative $0.30, this less-than-stellar result is causing investors to remain skeptical of the company’s growth power. This EPS ratio will continue to be key metrics in upcoming quarters to measure whether Sierra Wireless is a strong or weak IoT company.

• Loss in foreign exchange of currency hits Sierra Wireless’ balance sheet hard.

In the first quarter, a large loss of Sierra Wireless’ revenue occurred in a surprising place: the United States. The Canadian dollar’s current weak exchange rate relative to the U.S. dollar is incurring higher losses than in previous earnings reports, leading to an overall weaker EPS ratio. While in the second quarter the company actually reported a gain in foreign exchange from operations, the EPS ratio remains unimpressive.

With many of Sierra Wireless’ largest consumers being American companies, you should keep a close eye on this figure in the future.

Opportunities

• Smart acquisitions can continue to keep Sierra Wireless growing.

Recent acquisitions have helped Sierra Wireless grow its business portfolio. These include Wireless Maingate AB, MobiquiThings SAS, and Accel Networks LLC. As the company continues to bring its new purchases into the business, it may reach higher levels of profitability that investors will be happy about.

Similar purchases in the future can continue the growth that the company needs to compete with its bigger, more established competitors.

Threats:

• Sierra Wireless faces stiff competition in the race to lead the IoT revolution.

With a market capitalization of $732 million, Sierra Wireless looks like the small underdog company compared to the veteran giants lined up in the impending race to gain IoT supremacy.

Alphabet (Nasdaq:GOOG) is making headway in the mass consumer market with Nest’s smart home products, Salesforce.com (NYSE:CRM) is a leader in cloud computing for wireless “things”, and IBM (NYSE:IBM) hopes to provide big data and analytics using the information that all of these wireless devices collect.

Keeping all of this in mind, here is the bottom line. I’m interested to see if Sierra Wireless can pump up its earnings per share ratio, and though this stock isn’t for the risk averse investor, Sierra Wireless might be just the next big growth stock. And at the price of $30 per share, right now might be just the perfect time to buy into the next internet revolution.

The post Can Sierra Wireless, Inc. Dominate the Internet of Things? appeared first on The Motley Fool Canada.

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Fool contributor Chandler Coniglio has no position in any stocks mentioned. David Gardner owns shares of Netflix and Sierra Wireless. The Motley Fool owns shares of Netflix and Sierra Wireless.

At the present moment, Canadian oil prices still have a steep climb to recover after the worldwide decrease of crude oil prices, but some oil and pipeline companies are taking the steps to ensure profitable and long-term growth into the future, such as Pembina Pipeline Corporation (TSX:PPL)(NYSE:PBA).

Though a much smaller company than its native competitors (Alberta’s Enbridge Inc. has a market cap almost three times larger), Pembina has been making heavy capital investments into its oil pipeline network that will be realized over the next few years.

Let me give you a snapshot of Pembina’s current pipeline business. All in all, the revenue of this portion of Pembina’s business operations accounts for 34% of the company’s total revenue, by far the largest of its four core business activities.

The company commands a hydrocarbon pipeline network that stretches over 8,800 km across Alberta and British Columbia. Its network transports about 50% of Alberta’s oil output and 30% of the natural gas liquids produced in all of western Canada. On average, Pembina’s pipelines pump through 575,000 barrels of oil per day. But what if I told you that the company has plans to double that amount in the next two years?

Pembina has ambitious plans to expand its total network throughout the two provinces, and has committed to investing the capital necessary to pull off such a feat. The proof is in the pudding (or the annual report). Capital expenditures for the company in the 2014 fiscal year was a whopping $628 million, an astounding 93% increase from the previous year.

With this investment, the company is in the process of installing four brand new oil pipelines in Alberta and B.C. between Taylor, B.C., and Edmonton, A.B. as a part of its Phase III expansion. These expansions, the details of which are posted on its website, will add over 1,000 km of oil pipelines to meet consumer demand in the two provinces. These capital expansion projects into B.C. make Pembina the lead carrier of all conventional oil and condensate produced in western Canada.

Own their own, the Phase III pipelines will be able to increase oil carrying capacity up to 690,000 barrels each day. Altogether, this would bring Pembina’s total oil throughput capacity to 1.26 million barrels every day.

Set to come online between late 2016 and mid-2017, this planned step up in Pembina’s oil transportation capacity is already in the works. While the price of oil is still sitting in the rut of its half-year price slump, Pembina’s investments have set it up for huge revenue growth when oil prices recover. Combined with its highly competitive dividends, which have grown yearly since 1997, Pembina Pipeline Corporation promises better business operations in the future.

The post Why Pembina Pipeline Corporation’s Expanding Pipelines Promise a Bright Future appeared first on The Motley Fool Canada.

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It was early 2007. Each morning, I was driven to school by a neighborhood parent, Mrs. Hoffman. While the kids she drove looked disheveled in the early mornings, Mrs. Hoffman always dressed in sleek business clothes. She worked at a health insurance company, and commuted to a large office in the city each day. It was during one of these drives that I laid eyes on my first smartphone.

Mrs. Hoffman had just bought a new Pearl, and was enamored with its messaging and email capabilities. While stopping to pick up her charges, she could schedule lunch plans or tell her boss she’d be 10 minutes late to work. She frequently boasted about the convenience of the phone’s emailing capabilities, and would often be seen tapping out messages at lightning quick speed.

Mrs. Hoffman, along with 8 million others at the time, were “CrackBerry evangelists,” corporate professionals who made up BlackBerry Ltd.’s (TSX:BB)(Nasdaq:BBRY) core consumers, then a quickly ballooning market. BlackBerry was revolutionizing the world’s modern workforce.

Now in 2015, almost no one is buying a new BlackBerry smartphone. The company has a global market share of less than 1%.

So just how did BlackBerry, once the world’s fastest growing company, go from dominating the mobile phone market to near falling off the face of the planet in less than 10 years?

That’s the key question for Jacquie McNish and Sean Silcoff, two acclaimed journalists who’ve co-authored the book Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of BlackBerry. The answer boils down to three words.

Innovate or die

Losing the Signal documents the history of the Waterloo-based company through the stories of the two men at its heart: co-CEOs Mike Lazaridis and Jim Balsillie. One an engineering wunderkind, the other a Harvard Business School grad described as a financial “shark”, the duo banded together to build a wireless empire at the dawn of the 20th century. Together, Lazaridis and Balsillie pioneered breakthrough technologies in the mobile phone stone age to turn a small technology startup into one of the world’s largest technology companies.

The book is at times long-winded, especially in describing BlackBerry’s formative years. But it gathers steam during what I think is the most intriguing section of the book, a chapter entitled “The Jesus Phone”.

BlackBerry had just closed another incredibly successful quarter in 2007, and was riding a seemingly unstoppable upwards crest towards market dominance. But then, in a sudden, earth-shaking moment, Apple CEO Steve Jobs ascended a stage in San Francisco and introduced a new product that would revolutionize the smartphone industry: the iPhone.

The introduction of the iPhone, and soon Google’s Android, completely changed consumers’ perceptions of what a smartphone could be. Where BlackBerry marketed to working professionals, its competitors saw a wider market — everyone. The resulting market disruption is described by McNish and Silcoff in the following way:

“[Apple and Google] had shifted the smartphone market away from Lazaridis’s vision of a simple mobile e-mail device to a handheld mini-computer that was loaded like a Swiss Army knife with practical and whimsical add-ons.”

From then on, BlackBerry could simply not catch up with its more nimble competitors. Pressure from carriers forced BlackBerry to release disappointing product after product (I’m looking at you, Storm and PlayBook), and soon sales sagged. As the cracks in BlackBerry’s armor grew bigger, Lazaridis and Balsillie fought over the company’s future with disastrous results.

BlackBerry’s story is an allegory for what can happen to any company, even the most successful, in a competitive industry like technology. It is in the final chapters where McNish and Silcoff’s message blares clear: innovation can never cease. When one thinks they’ve conquered the “game” of business, it only takes a moment (or one keynote speech in California) to change the rules forever.

The post Foolish Book Review: “Losing the Signal” appeared first on The Motley Fool Canada.

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It has been almost eight years since smartphone maker BlackBerry Ltd. (TSX:BB)(Nasdaq:BBRY) closed at an all-time high of US$230.52 on the stock market. Today, with a stock price of just US$9, it’s obvious that BlackBerry has been shouldered out of the uber-competitive smartphone industry.

Once the industry’s top dog, Waterloo-based BlackBerry has not given up hope. The company launched two smartphone products in the fall of 2014, and upgraded its software offerings for corporate consumers. But how should investors react to consistently disappointing sales? Here is an analysis for Fools who look at the once beloved smartphone company and don’t know what to think.

Strengths:

Mobile security remains the BlackBerry’s standout feature, which appeals to corporate markets.

BlackBerry’s capacity for mobile security has always been a major selling point. The company’s phones come equipped with software that allows for encrypted messages, emails, and more. For this reason, BlackBerry has always been a favorite in what it calls “regulated industries”: government agencies, financial services, the military, and more. This, however, may be changing fairly soon.

In addition, BlackBerry is also upgrading its mobile software services for large enterprises. In November 2014, the company launched BES12, its latest enterprise mobility management (EMM) software. BES12 allows companies to securely manage their data on any smartphone platform. It seems that BlackBerry hopes cross-platform software products will mitigate the effects of underwhelming device sales, but it is unclear if the new software will stand up to competitors in the EMM industry.

Weaknesses:

Hardware device sales are at their lowest point ever.

Years ago, BlackBerry phones were the preferred device for professionals (one can still remember hordes of “CrackBerry” devotees). Today, however, the phone is just not selling. In the first quarter of 2009, BlackBerry captured a 20.1% share of the global smartphone market. By this quarter, its share will shrink to only 0.3% of the same market. The company will also only sell 1.3 million units. Worldwide.

BlackBerry phones don’t offer the bells and whistles that mass consumers want.

Innovative competitors like Apple, Samsung, and Google’s Android have completely swallowed up BlackBerry’s portion of device sales. While struggling to the keep up with fun, user-friendly features that consumers want from personal smartphones, the traditionally no-nonsense BlackBerry continues to heavily market mobile security as its main offering.

I don’t know about you, but security is not the first thing I consider when buying a new phone. And despite recent data hacks into Apple’s Cloud, consumers keep reaching for BlackBerry’s more whimsical competitors.

Opportunities:

BlackBerry’s impressive intellectual property portfolio makes the company a prime candidate for acquisition.

BlackBerry owns a whopping 44,000 patents relating to mobile technology that is valued at over US$1.2 billion. Though the company is down on its luck, its impressive patent portfolio would be a huge boon to any company seeking to acquire it.

Recently, rumors have circulated that Samsung and Xiaomi, a Chinese smartphone company, looked into the possibility of a takeover. As of yet, none of these rumors have proved true. But if it were to happen, an acquisition by a more successful company could drive up BlackBerry’s floundering stock.

Threats:

“Regulated institutions,” the prime target of BlackBerry’s marketing strategy, have been ditching the longtime Wall Street staple.

Banks and financial institutions, a famously loyal crowd of BlackBerry users, are starting to abandon the phone in favor of newer security software. According to Business Insider, institutions such as JPMorgan, Credit Suisse, and Citigroup are asking employees to turn in their expensive work-issued phones and instead use their own personal devices. In particular, JPMorgan has reportedly issued an order forcing all employees to return their BlackBerry devices within the next six to 12 months.

These cost-cutting movements towards Bring Your Own Device (BYOD) work environments are proving that BlackBerry is falling out of favor even with corporate types, its once-upon-a-time evangelists.

Instead, businesses are choosing downloadable enterprise apps, such as Good Technology or Citrix, to manage company data on any phone. The BYOD movement is a huge hit to what was BlackBerry’s core market, and there are no guarantees that the company will be able to retain customers with its competing BES12 software.

What now?

BlackBerry has fallen behind the innovation curve of its competitors ever since 2007 (the year Steve Jobs unveiled the iPhone), and will continue to struggle to reinvent its identity in a saturated market. Unless the Waterloo company advances a game-changing technology soon, the number of BlackBerrys in the world may soon fall to zero.

But with its high value patents, BlackBerry remains a prime target for acquisition. The company should take seriously consider an offer by a competitor if acquisition rumors turn out to be true.

The post Why BlackBerry Ltd. Is Losing the Corporate Consumer appeared first on The Motley Fool Canada.

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