Friday, August 19, 2016

BlackBerry Ltd

Sound bite for Twitter and StockTwits is: Had its day in the sun. Buying this is gambling that current management can turn this company around. They have not been able to do so, so far. I have my doubts, but you never can tell. The thing is that this company may exist but the real questions is can it make money for its shareholders again? See my spreadsheet on BlackBerry Ltd.

I do not own this stock of BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY), but I used to. I always liked tech stocks and this was a fast rising tech stock when I bought it. I bought this stock for capital gain. I first bought it in 1999 and then some more in 2000. I sold some in 2006 and 2007 to lock in some profit. I sold the rest of my stock in 2010. I made a 20.2% per year total return on this stock.

This thing I noticed when updating my spreadsheet was the difference in basic and diluted EPS. The first was a loss of $0.40 and the second was a loss of $0.86. The difference is because the company used the dilutive effect of the Debentures using the if-converted method, assuming conversion at the beginning of fiscal 2016 for the year ended February 29, 2016.

This was never a dividend paying stock and I bought it for capital gains only and also to have some fun investing. This stock hit a peak in early 2011 and has not done much for investors ever since. Revenue is down almost 90%. The company has not earned a profit in the last 4 years. Cash Flow is down over 90%.

The only good thing I can say is that the debt ratios are good. Liquidity Ratio is 2.90 and Debt Ratio is 2.38. The Leverage and Debt/Equity Ratios are 1.73 and 0.73. However I do not see how this can help a company with fast declining revenue etc.

I do not know how useful testing the stock price is. I cannot use Price/Earnings per Share (P/E) Ratios because the EPS is negative and that is not expected to change anytime soon. I also cannot therefore calculate a Graham Price.

The 10 year median Price/Book Value per Share Ratio is 2.89. The current one is 1.66 a value some 43% lower. The current P/B Ratio is based on BVPS of $6.33 and a stock price of $10.48. This would suggest that the stock price is relatively cheap. Why we get a good score here is because the Book Value has not fallen as far as Revenue, Earnings or Cash Flow. It is only down some 50% rather than 90%. Give it more time and it will probably fall more.

The 10 year median Price/Cash Flow per Share Ratio is 10.24 and the current P/CF Ratio at 22.49 is some 120% higher. The current P/CF Ratio is based on CFPS estimate for 2016 of $0.47 and a stock price of $10.48. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median P/S Ratio is 1.80 and the current P/S Ratio is 2.51, a value some 40% higher. The current P/S Ratio is based on Revenue of $1681M for 2016, Revenue per Share of $3.22 for 2016 and a stock price of $10.48.This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Buy, Hold, Underperform and sell. The most are a Hold and second is Underperform. The consensus would be a Hold. The 12 month stock price is $7.87 US$ or $10.19 CDN$. This implies a total loss of 2.79% CDN$ or 2.6% US$.

Jacob Donnelly of Motley Fool thinks that Blackberry needs to get out of the hardware business and focus on the software business. Patrick Brik on Profit Confidential does a technical analysis and expects a breakout. See what the analysts say on Stock Chase.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.

The last stock I wrote about was about was EnerCare Inc. (TSX-ECI, OTC-CSUWF)... learn more . The next stock I will write about will be ONEX Corp. (TSX-OCX, OTC-ONEXF)... learn more on Monday, August 22, 2016around 5 pm.

BlackBerry is securing a connected world, delivering innovative solutions across the entire mobile ecosystem and beyond. We secure the world's most sensitive data across all end points - from cars to smartphones - making the mobile-first enterprise vision a reality. Based in Waterloo, Ontario, BlackBerry operates offices in North America, Europe, Middle East and Africa, Asia-Pacific, and Latin America. Its web site is here BlackBerry Ltd .

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

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