Stock of the Week: BlackBerry

Got that hype stock fever? Consider this first

Andrew Willis 14 June, 2021 | 4:28AM
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Andrew Willis: As Canadians, Blackberry holds a special place in our hearts. I, for one, bought one of their last phones with their signature operating system – even while I watched other users on Android and Apple enjoy a far more improved interface with way more apps to choose from.

This nostalgia for past experiences is part of the reason GameStop, AMC, and Nokia, and yes, Blackberry have become cult favourites in the investment sphere, connecting investors with their youth, while fighting groups of relatively rich people with opposing bets.

We always caution that with sentiment-driven plays with little fundamental backing, investors should expect both dizzying highs, and cratering lows. With Blackberry, we don’t quite buy the hype.

Expectations of massive growth in the autonomous vehicle space, or a deluge of enterprise software customers, are a bit out there at the moment. Analyst William Kerwin says to expect maybe 12% compound annual growth in the space. The potential portfolio of patents being sold off isn’t a done deal, and value-neutral for now. And about Blackberry as a prime target for a merger or acquisition…we’re skeptical.

At the end of the day, we think the company can recover on its own, and while it might not lead to sudden, massive growth, their continued software innovations do remind us that there’s still research in motion.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
BlackBerry Ltd12.72 CAD0.16Rating

About Author

Andrew Willis

Andrew Willis  is Content Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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