Monday, August 12, 2019

BlackBerry Ltd

Sound bite for Twitter and StockTwits is: Tech Stock. This would be a high risk and it is hard to say at present if the company will reinvest itself and take off again. Testing of the current price shows the price is either cheap or expensive. It is not exactly clear. I do wonder if the risk buying this stock is worth the possible future gains. 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 return of 20% per year.

When I was updating my spreadsheet, I noticed that there is a lot of insider selling. It is at 0.95% of market cap over the past year. You would expect this to be around .02%. However, the selling is of stock options, but they are taking up some with the Chairman and CEO shares up 85%, the CFO shares up 139%. However, while V. Prem Watsa’s shares are flat and those for his company of Fairfax Financial Holdings Limited are down 10%.

This stock never had dividends and I had it while I was still working so I was not so concerned about dividends then.

Debt Ratios are all very good. The Long Term Debt/Market Cap Ratio for 2018 is 0.14. The Liquidity Ratio is 2.54 for 2018 with 5 year median at 2.79. The Debt Ratio is 3.04 in 2018 with 5 year median at 2.85. The Leverage and Debt/Equity Ratios are 1.49 and 0.49 respectively for 2018 with 5 year median at 1.50 and 0.50.

The Total Return per year is shown below for years of 5 to 21 to the end of 2018 in CDN$. I am only showing total return as all gain is from capital gains for this stock. In the last company, I am showing Total Return to the present date. Total Return has not improved. See chart below.

From Years Tot Ret CDN$ To Date
2013 5 4.21% -6.06%
2008 10 -15.03% -18.38%
2003 15 -2.62% -8.07%
1998 20 9.07% -0.88%
1997 21 10.60% 9.89%


The Total Return per year is shown below for years of 5 to 22 to the end of 2018 in US$. I am only showing total return as all gain is from capital gains for this stock. Here again, in the last column, I am showing total return to the present date. See chart below.

From Years Tot Ret US$ To date
2013 5 -0.90% -8.58%
2008 10 -15.99% -20.27%
2003 15 -2.95% -8.70%
1998 20 6.07% -0.47%
1996 22 9.94% 9.42%


The 5 year low, median, and high median Price/Earnings per Share Ratios are all negative and so of no help. The corresponding 10 year ratios 2.69, 4.62 and 5.79 are very low. The historical median ratios are 10.13, 18.09 and 30.32. The current P/E Ratio is negative as is the one for 2021. I have no conclusion for this testing.

I get a Graham Price of $5.41. The 10 year low, median, and high median Price/Graham Price Ratios are 0.70, 1.03 and 1.34. The current P/GP Ratio is 1.72 based on a stock price of $9.32. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.

I get a 10 year median Price/Book Value per Share Ratio of 1.91. The current P/B Ratio is 1.48 based on a stock price of $7.01, Book Value of $2,597M, and Book Value per Share of $4.74. The current ratio is 23% below 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This is in US$.

I cannot do an historical median dividend yield test because this stock has no dividends.

The 10 year median Price/Sales (Revenue) Ratio is 1.71. The current P/S Ratio is 3.38 based on 2020 Revenue of $1,135M, Revenue per Share of $2.07 and a stock price of $7.01. The current ratio is some 98% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in US$.

Results of stock price testing is that the stock price is mixed. The P/S Ratio cannot be ignored and it says that the stock price is relatively expensive. The reporting currency for this stock is in US$, but the testing results will be the same in either currency. The P/S Ratio has been very volatile on this stock over the years. Tech companies tend to have high ratios. The P/B Ratio says it is cheap, but this is taking a view from the past, where the P/S Ratio testing is viewing the future.

Is it a good company at a reasonable price? To buy this company at the present time would be risky and you may not be rewarded for taking the risk. I have moved on and I probably would not be buying this company in the future. However, there is a chance it would reinvent itself.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3), Hold (6), Underperform (1) and sell (1). The consensus would be a Hold, but the recommendations are really all over the place. The 12 month stock price is $11.06 US$ or $14.73 CDN$. This implies a total return of 58.09% in CDN$ using current price of $9.32 CDN$ and 57.77% in US$ using current price of $7.01 US$.

See what analysts are saying on Stock Chase. There are all Don’t Buy recommendations recently. David Jagielski on Motley Fool thinks you should buy this stock because it is now into cyber security. A writer on Simply Wall Street says the current price is a fair price, but there is a lot of uncertainty with this company. A writer on Simply Wall Street says people who bought BlackBerry 5 years ago are up 54%. However, this would only be true if you happened to buy it at its lowest point. To buy a stock at its lowest point is not easy. BNK Invest on Nasdaq says that BlackBerry is oversold. That means it is cheap.

BlackBerry, formerly Research in Motion, designs and markets wireless handsets, software, and services. Its primary revenue drivers are the sale of handsets to customers for personal and corporate use, a variety of software products used in embedded systems and for mobile device management, and service access fees from wireless carriers associated with securing and processing wireless data traffic. BlackBerry 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-ONEX, OTC-ONEXF) ... learn more on Wednesday, August 14 around 5 pm. Tomorrow on my other blog I will write about Speziale on Dividend Growth.... learn more on Tuesday, August 13, 2019 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.

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  3. "...BlackBerry, formerly Research in Motion, designs and markets wireless handsets, software, and services. Its primary revenue drivers are the sale of handsets to customers for personal and corporate use..."

    Blackberry quit designing and manufacturing phones several years ago. The Blackberry labelled phones that are currently being sold are designed and manufactured by TCL. Blackberry supplies a "hardened" version of Android for these devices and receives a royalty from TCL.

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