Last Friday, I asked if you remembered mixtapes, and this week I’m wondering you if you can remember BlackBerry (NYSE:BB).
When you left the office back in the ‘80s and ‘90s, you were at risk. You had primitive mobile devices and no way to check email or text.
I remember going through a litany of devices, and they each kind of worked, but nothing like BlackBerry. I became plugged in from Central China to Russia to Latin America. Even at sea, my BlackBerry always worked.
And it worked with absolute security, even with barely a single bar of coverage. But while the company’s devices did the heavy lifting, they weren’t up for games, posting odd photos of celebrity chef plates or cat videos like its peers’ fast-growing rivals.
BlackBerry was dumb enough to blow its advantages in mobile devices. But like my recommendation last week — TDK Corp. (OTCMKTS:TTDKY) — it was smart to invest in and develop myriad technologies, products and services.
Now it’s ready to capitalize on the 5G trend — and all the subsequent developments that we see as a result.
Internet of Things & Thieves
Today, BlackBerry doesn’t make a single phone. Instead, it provides the software and security for communications of voice and data for industries ranging from cloud computing companies, such as Amazon’s (NASDAQ:AMZN) Web Services and Microsoft’s (NASDAQ:MSFT) Azure, to power grid operators and power-generation companies, robotic operations of manufacturers and 90%+ of automakers.
At its core, it provides secure connections that are used by 77% of the Fortune 100 companies to make everything work while staying locked down.
The rapidly advancing 5G communications and autonomous vehicle markets are increasingly dependent on the products and services of BlackBerry. For 5G, data communications in larger amounts at faster speeds with lower latency means that thieves have more to steal. And for systems to work quicker and better, they need to be secure.
The automotive sector is where BlackBerry has a long history. Its QNX software platform is embedded in the vast majority of modern cars, running everything from infotainment systems to advanced driver assistance systems (ADAS). That’s the safety stuff that makes semi-autonomous cars safer.
But to make autonomous cars work, they need to constantly communicate with each other in real-time to avoid accidents. BlackBerry’s embedded systems and software and security really doesn’t have a peer for the autonomous car communications market.
Great Stuff, Bad Name
BlackBerry is trading around $5 a share, which values all of the patents, products, services as well as all of the huge clients around the globe at peanuts.
The price to intrinsic (book) value is only 1.38 times, which is a tiny fraction of most companies in this high-tech stratosphere. And it is only valued at 2.6 times its trailing sales, which are up by 15% over the past year.
The company has lots of cash, and debt is very low at only 19.5% of assets. But it needs some management improvements to shore up profits along with growth in its assets and revenues.
Daily Chart of BlackBerry Limited (BB) — Chart Source: TradingView
It looks like a high-tech flier but without the stock market fanboys. And with its cheap valuation and low stock price, it should be a target with the slew of new daytraders.
This isn’t the type of stock I typically recommend. But I see so much value in its assets, its book of business and its prospects with security and systems for so many important developments, including 5G and autonomous and other higher-tech vehicles, that I now want to get on board.
BB is definitely a buy, but it is a little risky. Buy in small amounts.
Neil George was once an all-star bond trader, but now he works morning and night to steer readers away from traps — and into safe, top-performing income investments. Neil’s new income program is a cash-generating machine…one that can help you collect $208 every day the market’s open. Neil does not have any holdings in the securities mentioned above.
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