I do not own this stock of BlackBerry Ltd (TSX-BB, NYSE-BB). 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 they still cannot earn a profit. Analysts do not expect any over the next two years either. Cash flow growth is negative as is Revenue growth. This is true for the last 5 years. There seems to be lots of insider selling, but it is just people getting rid of options. V. Prem Watsa is still involved and still have shares in this company.
The stock has never paid a dividend, so dividend yield information and Dividend Payout Ratios do not apply.
Debt Ratios are good except for the Liquidity Ratio. They currently have no long term debt, so Long Term Debt/Market Cap Ratio is 0.00. The Liquidity Ratio for 2019 is 1.07, even adding in cash flow, the ratio is only 1.09. This is quite low. The Debt Ratio is good at 2.86. The Leverage and Debt/Equity Ratios for 2019 are 1.54 and 0.54 and these are good.
The Total Return per year is shown below for years of 5 to 22 to the end of 2019 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | 0.00% | -8.10% | -8.10% | 0.00% |
| 2009 | 10 | 0.00% | -19.27% | -19.27% | 0.00% |
| 2004 | 15 | 0.00% | -8.74% | -8.74% | 0.00% |
| 1999 | 20 | 0.00% | -1.42% | -1.42% | 0.00% |
| 1997 | 22 | 0.00% | 9.34% | 9.34% | 0.00% |
The Total Return per year is shown below for years of 5 to 22 to the end of 2019 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | 0.00% | -10.18% | -10.18% | 0.00% |
| 2009 | 10 | 0.00% | -20.97% | -20.97% | 0.00% |
| 2004 | 15 | 0.00% | -9.24% | -9.24% | 0.00% |
| 1999 | 20 | 0.00% | -0.90% | -0.90% | 0.00% |
| 1997 | 22 | 0.00% | 9.00% | 9.00% | 0.00% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative. The corresponding 10 year ratios are also negative. The corresponding historical ratios are 9.80, 16.77 and 25.54. The current P/S Ratio for 2021 is negative. With negative P/E Ratios, this test cannot be done.
My best guess for a Graham Price is $4.62. 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 1.41 based on a stock price of $6.52. This stock price testing suggests that the stock price is relatively expensive. This test is in CDN$.
I get a 10 year median Price/Book Value per Share Ratio of 1.74. The current P/B Ratio is 1.41 based on a Book Value of $1,915M, Book Value per Share of $3.44, and a stock price of $4.87. The current P/B Ratio is 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This test is in US$. You will get similar results in CDN$.
I get a 10 year median Price/Cash Flow per Share Ratio of 7.33. The current P/CF Ratio is 34.79 based on Cash Flow per Share estimate for 2021 of $0.14, Cash Flow of $78M and a stock price of $4.87. The current ratio is 375% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This test is in US$. You will get similar results in CDN$.
I cannot do any dividend yield test as this stock has never paid and currently does not pay any dividend.
The 10 year median Price/Sales (Revenue) Ratio is 1.71. The current P/S Ratio is 2.83 based on Revenue estimates for 2021 of $955M, Revenue per Share of $1.72 and a stock price of $4.87. The current ratio is 66% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This test is in US$. You will get similar results in CDN$.
Results of stock price testing is that the stock price is probably relatively expensive. It is showing as cheap using the Price/Book Value Ratio, but others show differently. I think that the P/S Ratio test is a good one and it is showing as relatively expensive. It is sales, after all that run everything else.
Is it a good company at a reasonable price? This stock has not really done much since 2012. It is hard to know if the company as a software company will do good things or not. At the moment I would not be interested in this stock.
When I look at analysts’ recommendations, I find Buy (1), Hold (11) and Sell (1). The consensus would be a Hold. The 12 month stock price consensus would be $7.41 ($5.53 US$). This suggests a total return of 13.69% all from capital gains.
A number of analysts on Stock Chase feel that there are better tech companies to buy. Ryan Vanzo on Motley Fool is very positive about this stock because Vodafone Group has chosen BB for it security system. A writer on Simply Wall Street talks about a negative revision to this company’s forecast. A writer on Simply Wall Street says this stock’s intrinsic value is $9.82 CDN$. Chris MacDonald on Bay Street is rather negative about this stock.
BlackBerry, once known for being the world's largest smartphone manufacturer, is now exclusively a software provider with a stated goal of end-to-end secure communication for enterprises. The firm provides endpoint management and protection to enterprises and embedded software to automotive, medical, and industrial OEMs and suppliers. Its web site is here BlackBerry Ltd.
The last stock I wrote about was about was Stingray Digital Group Inc (TSX-RAY.A, OTC-NONE) ... learn more. The next stock I will write about will be Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF) ... learn more on Monday, August 10, 2020 around 5 pm.
Note: I am dropping Onex Corp (TSX-ONEX, OTC-ONEXF). I am never going to rebuy this stock and the accounting is complex, hard to follow and there is a disconnect in the accounting statements between 2018 and 2019.
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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