Sierra Wireless, Inc. (TSX:SW)(Nasdaq:SWIR) has a history of steady growth and consistently beats quarterly earnings estimates, but shares have recently started to dip in price. Is this a red flag or an opportunity?

Here are three reasons why the future looks bright for Sierra Wireless.

1. Philips CityTouch

This partnership with Philips has the potential to redefine how we run our cities. The CityTouch system is currently being tested in London and Prague in a pre-series run. The system would control all the lighting in a city and could instantly tell a central command center which lights are in need of repair, which areas need the most light and at what times based on population, and could optimize the energy used on lighting a city to lower energy costs and light pollution.

If this takes off, with Sierra Wireless components in it, the benefits for Sierra Wireless could be huge.

2. Verizon 4G LTE compatibility

The AirPrime EM7345 embedded wireless module just became certified for the Verizon 4G LTE system. As this is the largest network in the United States, and 97% of Americans have access to it, this could dramatically increase the machine-to-machine (M2M) capabilities of many devices.

Being integrated with Verizon’s network isn’t only an advantage for tablets and laptops, it can also be used for smartphones or any device where being thin is an advantage. This removes the need to be connected to wi-fi in order to do anything. As this is expanded, applications for these chips could be found all over the Internet of Things.

3. The Internet of Things is still growing

The Internet of Things is an industry growing at an alarming rate. Some estimates indicate that as an industry by 2019 it will be double the size of the smartphone, PC, tablet, wearable device, and connected car industries combined. Goldman Sachs estimates that the proliferation of the Internet of Things has brought the costs of processing down 60% over the last 10 years.

The ability to collect data remotely, and connect different devices with each other and with companies, has enormous implications for optimizing efficiency in business. As this market grows, more innovative applications for M2M devices and software are turning up, which means more opportunities are being brought to Sierra Wireless.

Sierra Wireless technology is in everything from your Nespresso coffee machine to automated scrolling billboards to the San Jose Police Department. Peugeot Citroën uses Sierra Wireless M2M devices to find out how its cars are running and discover any design flaws that may arise so that those issues can be directly relayed to manufacturers. The Seattle Fire Department uses Sierra Wireless InMotion to keep voice, video, and data communications open on multiple networks, eliminating the old radio system that was used. Now they can upgrade without having to overhaul their whole system, and the communications have been extended to their vehicles.

The bottom line? The uses for this technology are showing up in places you would never expect, and the industry is only gaining momentum. Sierra Wireless investors should see their shares gaining momentum as well.

The post 3 Reasons the Future Is Bright for Sierra Wireless, Inc. appeared first on The Motley Fool Canada.

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Fool contributor Paula Martinez has no position in any stocks mentioned. David Gardner owns shares of Sierra Wireless. The Motley Fool owns shares of Sierra Wireless.

After appearing near death for much of the past 24 months — it is about 85% below its five-year high stock price — BlackBerry’s (TSX: BB)(Nasdaq: BBRY) stock has gone up almost 35% thus far in 2014.

That’s great, but can the company can keep its business momentum going? Can it survive plummeting smartphone sales and find success outside that industry? I believe it can. BlackBerry has a great captain at its helm for this particular storm, the industry it is moving into is a great opportunity, and no – Apple (Nasdaq: AAPL) and IBM’s (NYSE: IBM) new partnership does not spell certain doom.

1. Interim CEO John Chen is a seasoned survivor

The company did well to choose Chen as the leader for this turnaround, as it isn’t the first time he’s weathered a tech storm. Chen was able to rescue Sybase, a mobile and enterprise software company, taking it from $362 million to $5.8 billion when it was acquired 13 years later. That is over 15 times its original worth. In addition to his position as CEO of Sybase, Chen was senior advisor at technology investment firm Silver Lake, and an executive at Siemens Nixdorf.

Chen’s former coworker Marty Beard has come on board to fill the BlackBerry COO void that had existed since November. Beard and Chen worked together at Sybase, and after their time there, Beard went on to work for Oracle, and most recently LiveOps, a cloud-based contact center provider. Chen’s choice of COO reemphasizes BlackBerry’s commitment to their enterprise services strategy.

2. BlackBerry is known for security, and is moving into markets where that is a priority

BlackBerry faces fierce competition from Samsung and Apple in the smartphone market, sure, but it has moved on and set its sights on a different industry. BlackBerry’s success is now measured in clients for its secure software instead of cell phones.

Secure messaging services, the secure QNX Cloud platform to be released in fiscal year 2015, and secure personal devices are only the tip of the iceberg. QNX can be found in everything from medical imaging equipment to casino gaming consoles. And remember that BlackBerry is the only Mobile Device Management (MDM) provider with coveted Authority to Operate (ATO) and Full Operational Capability (FOC) status with the American Department of Defense. In today’s paranoid world populated with hacking and spying, BlackBerry has a lot to offer.

The Apple/IBM relationship isn’t as scary as you think

When it was first announced, I’m sure it sounded really scary, but here’s a little secret: These two have a rocky relationship, and have failed at partnerships before. For example, in the 1990s the two began to build Taligent, a company developing an operating system intended to rival Windows, but dissolved that partnership three years after agreeing to work together. Kaleida was another 1990s joint venture that blew through $20 million in its first year of existence and strained the relationship between Apple and IBM due to its evident lack of progress.

And then there’s the 1984-inspired Super Bowl commercial in which Apple portrays IBM as the terrifying Big Brother.

IBM boasted in its 2013 annual report that it had helped 1,000 clients “become more mobile enterprises” while BlackBerry’s number is at 80,000 clients. Apple isn’t exactly leading the enterprise mobility market itself, so it seems unlikely to me that IBM and Apple can overcome BlackBerry’s competitive advantage in security even as a team.

The post 3 Reasons I’m Still a BlackBerry Believer appeared first on The Motley Fool Canada.

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A good way to size up a company and its market position is by conducting a SWOT analysis, looking at its internal strengths and weaknesses and external opportunities and threats.

Today, I’ll break down everything you need to know about Tim Hortons (TSX:THI)(NYSE:THI), the Canadian coffee and donut juggernaut, into delectable bite-sized portions.

Strengths

• Strong market share: It has a 27% share of dollars and 42% share of traffic in the Canadian Quick Service Restaurants category, more than next 15 chains combined.
• Iconic brand: Tim Hortons ranks No. 1 on the Canadian Business Top 40 Brands list, and was included as one of the 100 brands that APCO Insight found to be “Most Loved” globally. In fact, Tim Hortons ranks higher on the emotional attachment list than competitors Starbucks and McDonald’s.
• Financial discipline: Steadily increasing dividends are awarded every quarter like clockwork, starting with $0.07 every quarter in 2006 to $0.32 in the first quarter of 2014.
• Steady financial indicators: Free cash flow over the past 12 months has totaled $378 million and was $356 million in fiscal 2013. This easily covered the $160 million and $156 million in dividend payments that were made during these periods and helps provide further evidence of the strength of the Tim Hortons franchise.
• Investment in stores: Tim Hortons opened 261 locations in 2013, improved drive-thrus at more than 1,400 locations in Canada, and gave more than 300 restaurants in Canada and the U.S. “a more modern, contemporary look.”
• Well-established but still growing: The company’s 2014 financial outlook includes a total of 215 to 255 restaurant openings in Canada, the U.S., and the Gulf Cooperation Council, including 140 to 160 locations in Canada and 40 to 60 full-serve restaurants in the U.S.

Weaknesses

• Declining profitability for franchisees and store owners: A highly publicized class-action lawsuit has drawn attention to allegations that Tim Hortons was requiring franchisees to sell new lunch menu items at a loss.
• U.S. expansion has been sluggish: Tim Hortons has only a 2.7% market share in the highly saturated American market according to Technomic. After 36 closings in New England in 2011, Tim Hortons is coming back aggressively with plans to open 300 stores in the next four years, but it is uncertain now whether that strategy will be successful.
• Same-store-sales red flags: Yearly same-store-sales growth in both Canada and U.S. has declined every year from 2011 to 2013. In 2013 in both Canada and the U.S., Tim Hortons missed its same-store-sales growth targets. A “persistently challenged economic environment of [the] quick service restaurant industry” was blamed.

Opportunities

• Innovation: Tim Hortons is already testing new ways to stay competitive. These include K-Cup home coffee prodicts, new coffee blends, mobile payments, and express lines for improved service.
•  “Brunch and Brinner”: All-day breakfast options are growing in popularity, and with many 24-hour locations, Tim Hortons could benefit from a steady traffic of people seeking breakfast later in the day.
• Healthier options: Though Tim Hortons is best known for its coffee and donuts, many of its lunch options are healthier than those of competing fast-food establishments. More marketing emphasis on healthy offerings and a little improvement in the nutritional makeup of its soups and baked goods offerings could go a long way in making customers opt for Tims over McDonald’s.

Threats

• Competition: This is a crowded market! The number of Tims restaurants in Canada has jumped over 12% in past five years, though customer traffic has only increased 1%-2%. McDonald’s is remodeling many of its Canadian outlets. Tim Hortons was scheduled to have nearly 10% of 3,300 restaurants refurbished at end of 2013, but this is both fewer in absolute terms and a slower pace than McDonald’s Canada. Starbucks has been gaining ground, using a Canada-only brew called True North and singing the praises of maple with a new Maple Macchiato.
• Hard times: Lingering effects of a slow economic recovery mean fewer consumers eating outside the home. Operating income has been under pressure, and now Tim Hortons has to rely on lower prices to stay competitive, cutting into profits.
• Investor pressure: Highfields Capital Management (which owns 4% of shares) and Scout Capital Management (owns 5% of shares) oppose the expansion in America as returns have been lower than anticipated and the highly competitive U.S. fast-food market is just about saturated.

So what?

I really want to be in Tim Hortons’ corner. It has refused to buckle in the face of an economic recession, making it a clear force to be reckoned with. But the fact is that new CEO Marc Caira’s aggressive plan to expand into the U.S. is far from ideal. The best businesses are those that fulfill an unmet need. The United States has a sufficient ruckus in that industry with Dunkin Donuts, Starbucks, McDonald’s, Panera, and more.

It has been a reliable stock in the past, and I hope it stays that way as it transitions into its new five-year plan. But the company’s expectations for U.S. growth seem unrealistic and may end up costing it more than it bargained for.

There was a time when this stock would have been a sure bet, but now it looks too much like a gamble. Were Tims to change its tactics and expand to different regions with more promise, or differentiate its services and products in the U.S. so that they no longer overlap with every other fast food joint, I would happily recommend this stock to buy and keep for the long run.

The post Tim Hortons: Strengths, Weaknesses, Opportunities, Threats appeared first on The Motley Fool Canada.

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