BlackBerry (BB.TO)

(Market Call Minute) So last century. They are trying to find something to do now that they are out of the mobile handset business. They are just another software supplier and he can’t imagine why you would want to buy it.

He still likes it. GS-N just put it down to a sell. Chen seems to be hitting his targets for the most part. He bought it assuming it would be taken over, but that did not happen. He kept it because Chen had his previous company taken over. It is so big and has such a huge following that when it does well it can really shoot up.

If you own this, the most valuable parts are probably in the patent portfolio they accumulated that were necessary to make a mobile device. There may be somebody interested in these patents, but the problem is, it includes everything that goes with it such as leases on properties, potential severance, etc.

He doesn’t know the seasonality, but technicals show it has had a fantastic move this year, but is now going down. It has some strong support at around $11. The technology sector has a tendency to peak at around the middle of July, and then tends to weaken through to about the middle of October.

(Market Call Minute.) There is an interesting revival happening here. He is still doing a lot of homework on this. There is a lot of technology risk here.

He flips back and forth on it. They have a negative return on capital. He does not think it is going to be able to come back. They have not shown him enough for now. He is not there yet.

This has been through the grinder a few times. There is enough volatility that a trader could have some fun with it. Consolidated through much of last year, and broke out this year. If you get a break out, it can often roughly equal in volatility the movement of the former trading range. In this case, it actually overshot that, and has now moved back into its lower range. Technically, he would not buy this, as he thinks it could pull back to around $11.50.

The company never was able to deliver on the promise that John Chen brought. If they can translate those 60 million dashboards to another 60 million self driving cars, that would be wonderful. However, there isn’t anybody out there who is taking them on. This is not an investment, it is a speculation.

The company has worked very, very hard. There is no magic immediately. Be patient. They have a lot of expertise. The car will work out. They get royalties from the handhelds.

This had been a great story, but had to reinvent itself, so your time frame is really important. John Chen decided to change this into a software company, and it is going in a totally different direction. The market liked that their software, particularly in the automobile sector, is widely used, and there are lots of applications for that great software. The problem is, they have to change the business. Their unit sales are not really profitable relative to the share price, so it trades at a valuation level that doesn’t make any sense. You buy this because you believe that their software will be in vehicles or something else, 5-10 years from now.

They are in fast decline and some of the new businesses they want to get into have no guarantee of making up for the declining business. It is a tech stock, is very uncertain and is too risky.

Considers this as somewhat speculative. He has some in portfolios, but usually at the direction of clients. Recently the stock has gone up on the basis of the present management doing a better job. There was a little disappointment in the last quarter. The stock is fine, expectations just got a little ahead of themselves. They have lots of cash. Expects the stock will continue to make progress.

This has been in a period of restructuring and have really decided what they want to be now, and are executing on that. If you are patient, this will do well for you.

A company that has completely transformed itself, and is a different company going forward. They have their software in a ton of automotive. Thinks the stock can continue to trade higher. As some point, it could be a target of another company.

He has liked it for a while. There is major news about it now. They won a billion dollar law suit recently. He is going to sell somewhat over $23, but it could still keep going after that.