Wednesday, August 15, 2018

BlackBerry Ltd

Sound bite for Twitter and StockTwits is: Damaged tech stock. My stock price testing suggests that the current stock price is relatively expensive. People invest in such stock because of a belief that the stock will do great things in the future. I think that this is still an uncertainty for this company. On the other hand Prem Watsa is known for his astute investments. See my spreadsheet on BlackBerry Ltd.

I do not own this stock of BlackBerry Ltd. (TSX-BB, NYSE-BB) but I used to. 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.

When I was updating my spreadsheet, I noticed Fairfax Financial has slightly increased their shareholdings. The Fairfax stake is worth around $660M. They also accepted new debentures with a lower interest rate. Rate have gone from 6% to 3.75%. It would imply that Fairfax thinks the risk of these debentures have gone down.

Debt/Market Cap Ratio is very low at 0.12. Both the Liquidity Ratio and Debt Ratios are very good at 5.49 and 2.96. I want this to be 1.50 and above. The Leverage and Debt/Equity Ratios are also (and low) at 1.51 and 0.51 respectively.

The Total Return per year is show below for years of 5 to 20. This company has never paid dividends so all I have in the chart is Total Return. See charts below. Really long time holders have made money. It would appear that there have been recent gains. The stock did well in 2017.

Years Tot Ret
5 3.54%
10 -18.79%
15 9.83%
20 13.23%

The 5 year low, median, and high median Price/Earnings per Share Ratios are -2.70, -3.07 and -3.43. The corresponding 10 year ratio are 2.69, 4.62 and 5.7 in CDN$. The corresponding historical ratios are 9.80, 16.77 and 25.54 in CDN$. The current P/E Ratio is -36.52 CDN$ based on a stock price of $13.41 CDN$ and 2019 EPS estimate of -$0.37 CDN$. Obviously, a P/E Ratio test is not a good one for this stock.

I get a Graham Price of $1.62 CDN$. The 10 year low, median, and high median Price/Graham Price Ratios are 0.79, 1.14 and 1.44 in CDN$. The current P/GP Ratio is 8.30 CDN$ based on a stock price of $13.41 CDN$. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year median Price/Book Value per Share Ratio of 1.91 US$. The current P/B Ratio is 2.31 US$ based on Book Value of $2376M, Book Value per Share of $4.42 and a stock price of $10.24 US$. The current ratio is some 21% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.80 in US$. The current P/S Ratio is 6.17 based on 2019 Revenue estimate of $892 US$, Revenue per Share of $1.66 US$ and a stock price of $10.24 US$. The current P/S Ratio is some 243% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts’ recommendations I find Buy (2), Hold (12) and Underperform (7). The consensus would be a Hold. The 12 month stock price is $9.61 US$ ($12.60 CDN$). This implies a total loss of $6.03 CDN$ based on a current stock price of $13.41 or 6.15% based on a stock price of $10.24 US$.

Floyd Graber of Press Oracle says this company has an average recommendation of a Hold. Bill Maurer at Seeking Alpha says John Chen has not done a good job turning this company around. Demetris Afxentiou of Motley Fool thinks that Blackberry is a good beat for long term growth. See what analysts are saying on Stock Chase. Some like it, so do not.

BlackBerry Ltd is a Canada-based designer, manufacturer, and marketer of wireless solutions for the mobile communications market. It also owns QNX, a leader in software used in automotive infotainment systems. Its web site is here BlackBerry Ltd.

The last stock I wrote about was about was Stingray Digital Group Inc (TSX-RAY, OTC-NONE) ... learn more. The next stock I will write about will be Onex Corp. (TSX-OCX, OTC-ONEXF) ... learn more on Friday, August 17, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividends and Volatility.... learn more on Thursday, August 16, 2018 around 5 pm.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

1 comment:

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