Blackberry: Simple Reasons To Go Long

http://seekingalpha.com/article/1188301-blackberry-simple-reasons-to-go-long?source=yahoo

 

 

Disclosure: I am long BBRY(More...)

There is no doubt that BlackBerry (BBRY) is a polarizing stock. It is quite evident in the varying articles we see daily either for or against this company's chances of success and the emotional "comments" we see in the comment sections.

For those seeking some information as to why one should consider a long play, I have detailed below some points that I feel lend themselves to giving BlackBerry some consideration.

Competition

The once mighty Apple (AAPL) has made some major miscues as of late. Yesterday CNN Money reported on a major security flaw with iPhones running iOS 6. This should have anyone worried about personal or corporate data worried. BlackBerry has built a reputation around security and it is failures like this (although not widely reported in the major media) that will draw consumers to the BB10 platform.

Apple has also now been accused by carriers of a software flaw in iOS 6 that is clogging up networks. It has been so bad that Microsoft (MSFT) has recommended that users having problems with Microsoft Exchange Servers "Block or Throttle iOS users on the network"

Consumer Opinion

At the end of the day it is the end users, the consumers who will decide the fate of BlackBerry. Feedback has been positive and a recent article by The Gadget Masters' consolidated consumer polls from major carriers in Canada and the U.K. titled "BlackBerry Z10 is Crushing iPhone 5, Galaxy SIII and Note II in Customer Satisfaction" goes on to review carrier data on Customer Satisfaction. It is very clear here that consumers like what they see in the BlackBerry Z10.

It should also be noted that a recent poll by YouGov Brand Index shows that interest in the BlackBerry BB10 platform has skyrocketed in the U.S. A recent poll by Canada's Globe and Mail suggests that up to 2.6 million BB10 phones could be sold in Canada alone.

Catalysts

This stock is volatile and not for the weak of heart. However, there are many catalysts that I believe can drive it much higher. There are over 122 million shares short which at any time can trigger a short squeeze like the recent one played out with Netflix (NFLX). The CEO Thorsten Heins has alluded several times to licensing deals for the BB10 OS, most recently stating that licensing the BB10 to low end handset makers could happen in as little as 6 months time.

Goldman Sachs has also advised that analysts estimates are low for the next 3 quarters and that any upgrades in earnings expectations by analysts covering the stock could trigger some upward movement. In a note to clients analyst Simona Jankowski advised clients to "Ignore the chatter and buy".

Recent Trading

The stock has been experiencing a great deal of fluctuation, moving in one direction or another on even the smallest tidbit of news.

Below is a 3 month chart that shows quite well the wild ride this stock has taken.

3 Month Chart -Yahoo Finance
(Click to enlarge)

Yesterday alone we saw a 10% swing in PPS with over 112 million shares trading hands, well above the average of 62 million. It is obvious that this stock trades wildly on emotion but taking a step back to look at long-term prospects with an eye on consumer sentiment is key.

In summary, it is obvious that the time for BlackBerry to deliver is here and now. The next quarterly report will give investors some big indications as to whether or not BlackBerry can survive. Do your research and invest accordingly. Take some advice from Goldman and "Ignore the chatter".

 
 
 
 
Comments (71)
 
 
 
  • Nice article Kurt. Hope all longs populate your comment board.
    "This stock is volatile and not for the week of heart." is an understatement, especially for this"week".
    15 Feb, 01:46 PMReplyLike12
     
  • Very good comments..Agreed!
    In addition, analysts are pointing out that Blackberry doesn't need to be the I-phone killer. All Blackberry needs to do is focus on their own products, infrastructure-software, and sales plan. Their subscriber base will do the rest as it continues grow and produce massive NOI returns!
    Competition and rumors will always exist. That is a given. Blackberry already knows internally what it takes to grow their P/L. Their are over 10 major markets still waiting for the phone to roll out. This stock will continue to be a volatile stock; however it will keep climbing as their financials begin to reflect the growth!
    After that Blackberry will introduce new product to bring to the market as well. They will continue to drive their bottom line.
    This will be a short and long term success stock.
    15 Feb, 03:46 PMReplyLike4
     
  • ignore the chatter is exactly what Im doing. Go Blackberry !
    15 Feb, 01:47 PMReplyLike10
     
  • a good article Kurt. I would just add that it is more than "just chatter" that one has to ignore wrt blackberry. It is the blatant misinformation coming out of the US by so-called analysts and the mainstream media, who appear to have a vendetta against blackberry, and a strong pro-Apple bias.
    15 Feb, 01:49 PMReplyLike12
     
  • Agreed, they are numerous and relentless.

    Luckily BB10 is hitting the shelves now, once people try it out they're even dumping their iphones and Android for it, no amount of unethical reporting and analysis can't sway their minds then.

    These USA based market manipulators and biased reporters are having less and less effect with each passing week as a new country releasing BB10 reports great sales

    ..I'ld say the Short squeeze is coming anytime within the next 2 months as they lose hope of driving it down to $6 and cut their losses.
    15 Feb, 02:14 PMReplyLike7
     
  • Agreed. There is SUPER strong pro-Apple bias. The Jim Cramers of the world protect their once big money maker with the hopes that the good days return. It's laughable when I see the crew at CNBC, and others, including the gadget press, coddle Apple and apologize for it when something negative regarding Apple surfaces. Now, when an Apple competitor slips, WATCH OUT! Out comes the "end of the world" and doomsday scenarios for that company and its shareholders. I remember when Nokia launched the Lumia 920 last year. Critics (Apple fans) were even criticizing what Steven Elop and a female presenter were wearing on stage during the presentation. LMAO. It was THAT bad. 

    As such, if and when Blackberry makes its anticipated comeback and the stock begins climbing very high expect the above mentioned people to get on the BB bandwagon. It wouldn't hurt.

    BTW, nice piece, Kurt. Looking forward for more articles.

    -Cheers.
    15 Feb, 03:57 PMReplyLike8
     
  • A very balanced article. BB is not perfect but they are trying to reinvent. The problem with the naysayers is that they have already decided that BB has failed and cannot recover. The seem to forget that Apple was almost bankrupt not too long ago. BB has a new solid platform. I bought a new z10, and simple love it. My family uses iPhone and android but after they saw my z10, everyone wants one. As long BB can continue to innovate they will recapture their market share.
    15 Feb, 01:53 PMReplyLike10
     
  • Thanks for reporting real feedback and real issues with competing devices. It seems to be ignored in the MSM that the core market in teh USA is not kids shooting angry birds, it is corporate communicators who don't want the contents of their devices leaked to anyone.

    The iOS 'miscue' as you call it, it huge. It is exactly anateurish things like that which RIM does not countenance. The 'delayed' launch was to make sure it actually works and that takes time. The two Apple iOS issues are not related but came with the same patch. I don't think iOS is ready for the enterprise world, quite frankly, much as people want it to be.
    15 Feb, 01:53 PMReplyLike7
     
  • Kurt, good analysis and references.
    I totally agree that going LONG is the way with BBRY. It just seems most of the investors today want to short the stocks and make a quick buck and run, no one sees the long term potential anymore which bothers me because a lot of companies lose value when investors flee to make another quick buck elsewhere.
    With BBRY going forward I am not sure if there will be a licensing deal coming up later in this year, but that will surely send this stock up by at least 30% or so. For now it seems to be getting a lot of resistance around the $14-$15 range, not sure why. 
    Yes the iOS and Android issues will soon start exploding, and when big corporations lose their data or get hacked then BBRY will again be seen as the primary enterprise friendly choice. But even for consumers, they should be worried that their personal device content could be attacked or accessed by others. Today's smart phones are like the home PC with smaller screens, some of them even have more power and functionality, so why would anyone want to be careless and risk their data.

    All in all, great article, keep it coming.
    15 Feb, 01:55 PMReplyLike6
     
  • Another thing to think about is Monday is a holiday in the US but not in Canada, last time this happened was January 18 to January 22
    Jan 22, 2013 17.07 17.90 16.90 17.90 110,834,000 17.90
    Jan 18, 2013 15.86 15.94 15.34 15.84 71,198,300 15.84

    Monday will be big in BBRY in the .to exchange
    15 Feb, 01:58 PMReplyLike2
     
  • Actually, T, Monday is a holidy here too -- FAMILY DAY!! 
    A nice break between Christmas and Easter.
    15 Feb, 02:15 PMReplyLike1
     
  • In that case everyone should be out getting those Z10s turned on :-)
    15 Feb, 02:33 PMReplyLike5
     
  • There is a holiday in Canada on Monday, Family Day. The TSX will be closed.
    15 Feb, 03:24 PMReplyLike0
     
  •  Canadian Market is closed Monday as well....i think!
    15 Feb, 06:28 PMReplyLike0
     
  • "There is a holiday in Canada on Monday, Family Day. The TSX will be closed."

    No problem. You can buy puts or short the stock in Europe, no holiday there.

    It is highly entertaining and absolutely fascinating to see how groupthinkhttp://bit.ly/uJl1Ja has literally infected many SA members discussing this stock as if in an anaphylactic shock. Some U.S. hate and slander thrown in for good measure by some. Sweden lost their car industry. Germany their camera industry. The UK its shipbuilding industry. If Canada loses its mobile device industry, so what? Something else will emerge. Buying stock on patriot motivation is nothing but gross negligence. Unconfirmed sales in two countries like Canada (~33m) and the UK ~63m) are projected onto the global market ... no risk, no fun, I'd say.
    15 Feb, 06:42 PMReplyLike0
     
  • Everyone here would like it if you said nothing, SystemLoser, seeing as your posts are that of a 5 year old. Grow up and get lost. You are a turd. We all know you've lost your shirt on BB. We are all laughing AT you about it. Your wife left you, and your kids hate you. You are a loser in every way, with no future to speak of. TTFN.
    15 Feb, 06:47 PMReplyLike2
     
  • Stevey Boy, you are a very good entertainer, that's why I like you. You bring much needed drama and storyboarding to the table that makes this stock so fascinating.

    I expose your groupthink, and you react nicely, swiftly and, of course, predictably. After reading about stock options, you could further enhance your rethoric and read about Pavlov's dogs here http://bit.ly/XLHZ7N
    15 Feb, 06:57 PMReplyLike1
     
  • Thank you very much for this article!!! I have been waiting for these surveys for a while. Please keep them coming. 

    I have been doing my own informal studies of cellular sales reps. (1-2 per day). Every one has suggested the z10 first. One store today said that the z10 is selling 60/40 over the iPhone. I even have tried being completely dumb and lead with "I need one of those smart phones, which would you suggest "

    The next quarterly results should start to show a nice shift. Look out Shorties!
    15 Feb, 07:26 PMReplyLike2
     
  • Like I said, SystemLoser, you will do anything to deflect the fact that you are taking huge losses on BB. Lovin' it!! Good luck with your new life on the streets.
    15 Feb, 07:36 PMReplyLike1
     
  • Very sound advice and very enlightening info on iOS6... ;)
    Thank you!
    15 Feb, 02:02 PMReplyLike4
     
 
 
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Disclosure: I am long BBRY(More...)

There is no doubt that BlackBerry (BBRY) is a polarizing stock. It is quite evident in the varying articles we see daily either for or against this company's chances of success and the emotional "comments" we see in the comment sections.

For those seeking some information as to why one should consider a long play, I have detailed below some points that I feel lend themselves to giving BlackBerry some consideration.

Competition

The once mighty Apple (AAPL) has made some major miscues as of late. Yesterday CNN Money reported on a major security flaw with iPhones running iOS 6. This should have anyone worried about personal or corporate data worried. BlackBerry has built a reputation around security and it is failures like this (although not widely reported in the major media) that will draw consumers to the BB10 platform.

Apple has also now been accused by carriers of a software flaw in iOS 6 that is clogging up networks. It has been so bad that Microsoft (MSFT) has recommended that users having problems with Microsoft Exchange Servers "Block or Throttle iOS users on the network"

Consumer Opinion

At the end of the day it is the end users, the consumers who will decide the fate of BlackBerry. Feedback has been positive and a recent article by The Gadget Masters' consolidated consumer polls from major carriers in Canada and the U.K. titled "BlackBerry Z10 is Crushing iPhone 5, Galaxy SIII and Note II in Customer Satisfaction" goes on to review carrier data on Customer Satisfaction. It is very clear here that consumers like what they see in the BlackBerry Z10.

It should also be noted that a recent poll by YouGov Brand Index shows that interest in the BlackBerry BB10 platform has skyrocketed in the U.S. A recent poll by Canada's Globe and Mail suggests that up to 2.6 million BB10 phones could be sold in Canada alone.

Catalysts

This stock is volatile and not for the weak of heart. However, there are many catalysts that I believe can drive it much higher. There are over 122 million shares short which at any time can trigger a short squeeze like the recent one played out with Netflix (NFLX). The CEO Thorsten Heins has alluded several times to licensing deals for the BB10 OS, most recently stating that licensing the BB10 to low end handset makers could happen in as little as 6 months time.

Goldman Sachs has also advised that analysts estimates are low for the next 3 quarters and that any upgrades in earnings expectations by analysts covering the stock could trigger some upward movement. In a note to clients analyst Simona Jankowski advised clients to "Ignore the chatter and buy".

Recent Trading

The stock has been experiencing a great deal of fluctuation, moving in one direction or another on even the smallest tidbit of news.

Below is a 3 month chart that shows quite well the wild ride this stock has taken.

3 Month Chart -Yahoo Finance
(Click to enlarge)

Yesterday alone we saw a 10% swing in PPS with over 112 million shares trading hands, well above the average of 62 million. It is obvious that this stock trades wildly on emotion but taking a step back to look at long-term prospects with an eye on consumer sentiment is key.

In summary, it is obvious that the time for BlackBerry to deliver is here and now. The next quarterly report will give investors some big indications as to whether or not BlackBerry can survive. Do your research and invest accordingly. Take some advice from Goldman and "Ignore the chatter".

 
 
 
 
Comments (71)
 
 
 
  • Nice article Kurt. Hope all longs populate your comment board.
    "This stock is volatile and not for the week of heart." is an understatement, especially for this"week".
    15 Feb, 01:46 PMReplyLike12
     
  • Very good comments..Agreed!
    In addition, analysts are pointing out that Blackberry doesn't need to be the I-phone killer. All Blackberry needs to do is focus on their own products, infrastructure-software, and sales plan. Their subscriber base will do the rest as it continues grow and produce massive NOI returns!
    Competition and rumors will always exist. That is a given. Blackberry already knows internally what it takes to grow their P/L. Their are over 10 major markets still waiting for the phone to roll out. This stock will continue to be a volatile stock; however it will keep climbing as their financials begin to reflect the growth!
    After that Blackberry will introduce new product to bring to the market as well. They will continue to drive their bottom line.
    This will be a short and long term success stock.
    15 Feb, 03:46 PMReplyLike4
     
  • ignore the chatter is exactly what Im doing. Go Blackberry !
    15 Feb, 01:47 PMReplyLike10
     
  • a good article Kurt. I would just add that it is more than "just chatter" that one has to ignore wrt blackberry. It is the blatant misinformation coming out of the US by so-called analysts and the mainstream media, who appear to have a vendetta against blackberry, and a strong pro-Apple bias.
    15 Feb, 01:49 PMReplyLike12
     
  • Agreed, they are numerous and relentless.

    Luckily BB10 is hitting the shelves now, once people try it out they're even dumping their iphones and Android for it, no amount of unethical reporting and analysis can't sway their minds then.

    These USA based market manipulators and biased reporters are having less and less effect with each passing week as a new country releasing BB10 reports great sales

    ..I'ld say the Short squeeze is coming anytime within the next 2 months as they lose hope of driving it down to $6 and cut their losses.
    15 Feb, 02:14 PMReplyLike7
     
  • Agreed. There is SUPER strong pro-Apple bias. The Jim Cramers of the world protect their once big money maker with the hopes that the good days return. It's laughable when I see the crew at CNBC, and others, including the gadget press, coddle Apple and apologize for it when something negative regarding Apple surfaces. Now, when an Apple competitor slips, WATCH OUT! Out comes the "end of the world" and doomsday scenarios for that company and its shareholders. I remember when Nokia launched the Lumia 920 last year. Critics (Apple fans) were even criticizing what Steven Elop and a female presenter were wearing on stage during the presentation. LMAO. It was THAT bad. 

    As such, if and when Blackberry makes its anticipated comeback and the stock begins climbing very high expect the above mentioned people to get on the BB bandwagon. It wouldn't hurt.

    BTW, nice piece, Kurt. Looking forward for more articles.

    -Cheers.
    15 Feb, 03:57 PMReplyLike8
     
  • A very balanced article. BB is not perfect but they are trying to reinvent. The problem with the naysayers is that they have already decided that BB has failed and cannot recover. The seem to forget that Apple was almost bankrupt not too long ago. BB has a new solid platform. I bought a new z10, and simple love it. My family uses iPhone and android but after they saw my z10, everyone wants one. As long BB can continue to innovate they will recapture their market share.
    15 Feb, 01:53 PMReplyLike10
     
  • Thanks for reporting real feedback and real issues with competing devices. It seems to be ignored in the MSM that the core market in teh USA is not kids shooting angry birds, it is corporate communicators who don't want the contents of their devices leaked to anyone.

    The iOS 'miscue' as you call it, it huge. It is exactly anateurish things like that which RIM does not countenance. The 'delayed' launch was to make sure it actually works and that takes time. The two Apple iOS issues are not related but came with the same patch. I don't think iOS is ready for the enterprise world, quite frankly, much as people want it to be.
    15 Feb, 01:53 PMReplyLike7
     
  • Kurt, good analysis and references.
    I totally agree that going LONG is the way with BBRY. It just seems most of the investors today want to short the stocks and make a quick buck and run, no one sees the long term potential anymore which bothers me because a lot of companies lose value when investors flee to make another quick buck elsewhere.
    With BBRY going forward I am not sure if there will be a licensing deal coming up later in this year, but that will surely send this stock up by at least 30% or so. For now it seems to be getting a lot of resistance around the $14-$15 range, not sure why. 
    Yes the iOS and Android issues will soon start exploding, and when big corporations lose their data or get hacked then BBRY will again be seen as the primary enterprise friendly choice. But even for consumers, they should be worried that their personal device content could be attacked or accessed by others. Today's smart phones are like the home PC with smaller screens, some of them even have more power and functionality, so why would anyone want to be careless and risk their data.

    All in all, great article, keep it coming.
    15 Feb, 01:55 PMReplyLike6
     
  • Another thing to think about is Monday is a holiday in the US but not in Canada, last time this happened was January 18 to January 22
    Jan 22, 2013 17.07 17.90 16.90 17.90 110,834,000 17.90
    Jan 18, 2013 15.86 15.94 15.34 15.84 71,198,300 15.84

    Monday will be big in BBRY in the .to exchange
    15 Feb, 01:58 PMReplyLike2
     
  • Actually, T, Monday is a holidy here too -- FAMILY DAY!! 
    A nice break between Christmas and Easter.
    15 Feb, 02:15 PMReplyLike1
     
  • In that case everyone should be out getting those Z10s turned on :-)
    15 Feb, 02:33 PMReplyLike5
     
  • There is a holiday in Canada on Monday, Family Day. The TSX will be closed.
    15 Feb, 03:24 PMReplyLike0
     
  •  Canadian Market is closed Monday as well....i think!
    15 Feb, 06:28 PMReplyLike0
     
  • "There is a holiday in Canada on Monday, Family Day. The TSX will be closed."

    No problem. You can buy puts or short the stock in Europe, no holiday there.

    It is highly entertaining and absolutely fascinating to see how groupthinkhttp://bit.ly/uJl1Ja has literally infected many SA members discussing this stock as if in an anaphylactic shock. Some U.S. hate and slander thrown in for good measure by some. Sweden lost their car industry. Germany their camera industry. The UK its shipbuilding industry. If Canada loses its mobile device industry, so what? Something else will emerge. Buying stock on patriot motivation is nothing but gross negligence. Unconfirmed sales in two countries like Canada (~33m) and the UK ~63m) are projected onto the global market ... no risk, no fun, I'd say.
    15 Feb, 06:42 PMReplyLike0
     
  • Everyone here would like it if you said nothing, SystemLoser, seeing as your posts are that of a 5 year old. Grow up and get lost. You are a turd. We all know you've lost your shirt on BB. We are all laughing AT you about it. Your wife left you, and your kids hate you. You are a loser in every way, with no future to speak of. TTFN.
    15 Feb, 06:47 PMReplyLike2
     
  • Stevey Boy, you are a very good entertainer, that's why I like you. You bring much needed drama and storyboarding to the table that makes this stock so fascinating.

    I expose your groupthink, and you react nicely, swiftly and, of course, predictably. After reading about stock options, you could further enhance your rethoric and read about Pavlov's dogs here http://bit.ly/XLHZ7N
    15 Feb, 06:57 PMReplyLike1
     
  • Thank you very much for this article!!! I have been waiting for these surveys for a while. Please keep them coming. 

    I have been doing my own informal studies of cellular sales reps. (1-2 per day). Every one has suggested the z10 first. One store today said that the z10 is selling 60/40 over the iPhone. I even have tried being completely dumb and lead with "I need one of those smart phones, which would you suggest "

    The next quarterly results should start to show a nice shift. Look out Shorties!
    15 Feb, 07:26 PMReplyLike2
     
  • Like I said, SystemLoser, you will do anything to deflect the fact that you are taking huge losses on BB. Lovin' it!! Good luck with your new life on the streets.
    15 Feb, 07:36 PMReplyLike1
     
  • Very sound advice and very enlightening info on iOS6... ;)
    Tha