BlackBerry (BB.TO)

CEO has done a masterful job of trying to figure out where the company wants to be in its next life, but just too much of a punt at this point in time. Taking their core competencies, the brand, their technological advantage around security, they are in the midst of a transformation.

(Top Pick Jan 14/14, Up 37.80%) Likes what he sees. Loves turn around stories. It was a ‘coming out of the blue’ strategy.

This is on a nice comeback trail. The stock has come up since John Chen took over about a year ago. He has done a lot of right things, including cutting costs to get to cash flow breakeven and narrowed the focus of the company to enterprise business users as well as software. A lot of things are taking shape, so he really likes the prospects however, the current stock price cannot be justified based on the short-term earnings. It has a lot of challenges because of the very small market share as well as continuing to lose service revenue which is high margin. You have to make a bit of a bet on this, but he thinks John Chen will be successful. It won’t be quick and easy.

The more things go on, the more he likes the stock. John Chen has lucked into other potential big winners. All of this Internet security stuff, such as Sony officers and Directors being told to use Blackberry only, that is advertising that you can’t buy. The security of the blackberry system is such that he suspects there will be a lot more of this. This is now a very, very interesting stock. He has an immediate target of $15 short-term, but followed by much higher targets.

Not a technologist, so can’t predict what a company like this is going to be doing in 5-10 years from now. Too difficult for him to wrap his head around as to what is going to happen down the road. He just doesn’t look at this name because of the nature of it.

Stock is holding in nicely at around the $11 level. It is clearly business oriented and security oriented. Likes John Chen and thinks he is very impressive. He knows what to do. Handhelds is not a good area, but they are steering towards software.

Likes what management has done, but doesn’t like the sector in general. There is a lot of competition, especially from the Chinese manufacturers of hand sets. This company has done very well at turning itself around, but because of the sector and that he thinks margins are coming down, he would not be in this at this time.

(A Top Pick Jan 14/14. Up 33.24%.) This company was down and out, but what he saw and still sees is that you are literally buying a software company, not a device company. He was buying it at Book or a little under Book, which is impossible to do anywhere in this market. Will hold this for 3-5 years and see what happens. There is a lot more gain to be had.

This company is really doing what they said they were going to do. The problem is that perception is really against them. Their last quarterly reports have been beating expectations. Market is questioning whether they can continue to execute. From what he sees so far, John Chen is doing an excellent job. Expects the numbers will move into the green fairly soon and the stock will probably move higher.

Likes John Chen. He looks at management. Chen has a good track record and has the ability to turn the company around. Balance sheet is still not so bad. Fairfax is still behind them. It will turn around. It is just a question of time.

John Chen is a very good businessman and very clear thinker and probably exactly the right person for this company when they needed it. This is never going to be the BlackBerry that it was. The business it is in is never going to see the kind of growth profile you get when you get a hot handset trend. Chen has a good idea in his security thinking and he wouldn't bet against this. Risk profile is still too high for him.

Rumours of their demise have clearly been exaggerated. New management has caused a bit of resurgence in the stock. Technically it has broken through a level that it had been bumping its head against.

Chart shows it is forming a huge symmetrical triangle, and usually that is followed by a breakout, either up or down. He expects it will be up rather than down, so Shorting this would be a bad idea. Just made a new 52-week high. His rule is that the 1st 52-week high will not be the last one. He expects there will be more.

This had a long-term downtrend from 2010. It still officially is in a downtrend, but attempting to break out. Forming a bit of a descending triangle and there's very strong resistance at around $12.50. If this breaks through $12 on volume, and can stay there a few days, it will break the bigger picture downtrend and will have broken out of the triangle. To him that would target the old high of $17 and, further on, it could even get into the $20 area. Don't buy it unless it breaks the $12.50 level and stays there for several days.

He is not buying into the turnaround story. Found that the Passport was too big for his hand, and he can't see this taking off. John Cheng has done a great job. He just can't see this company being a long-term standalone vehicle.