After being beaten up in the last few trading days, I have taken the time to review some of the main reasons that I have invested my money with BlackBerry (NASDAQ:BBRY). BlackBerry has been, without a doubt, a fun ride for such a young investor like me - attributing to excessive gains in the options market, and crushing pullbacks, like those that we have experienced on March 22nd and 25th. If you believe in BlackBerry's fundamental approach, revolutionary operating system, new products, ability to retain its subscribers, and its future innovation, this article will be a review for you, if not some much needed relief in the face of such negative media coverage. For myself, it gives me time to reflect on why I have put my money into this company, and why we will potentially see one of the greatest comebacks in the relatively young industry of selling wireless communications products.
For easy reading, I have listed why BlackBerry will survive and thrive in the foreseeable future.
1. QNX - for those that understand this BlackBerry company, I could leave it at that... "QNX". For those that do not know anything about it, it is one of the fundamental reasons I own shares and options in the company today - the future of the company and its innovations will come from QNX. For a very good review of how the QNX touches everybody's life, read this article. It amazes me how much potential can and will be unlocked from this company. BlackBerry's management understand this potential and realize they need to unlock profits from it, and have been relatively tight-lipped about those profits, but I suspect they will be coming around the corner. The integration of one's mobile phone, touted as a mobile computer by CEO Thorsten Heins, with the products that the QNX operates in, will give business owners and consumers and unparalleled ability to control, review and manage their affairs wherever they are. Mr. Heins has been espousing his company's vision of mobile computing since the release in New York, and yet again in a discussion with ABC News.
2. BlackBerry's new line of products, the Z10 and Q10, will bring the company back to relevancy, if not drive the company to profits before the consensus that this could take them 2 to 3 years. When you think of the potential earnings from both the QNX and the new BB products, I am sure you can hypothesize that this company may turn things around sooner than the nay-sayers think. I will not list sources of reviews, as there have been many that have populated both SA and the web in the past month. The true test is to ask those that own the Z10, and from what I gather, they cannot put the phone down. From my perspective, the Z10 has been put to market to compete and regain lost subscribers to Apple (NASDAQ:AAPL) and Samsung. A real catalyst for share price and the company will come when the Q10 is released and some of those 79 million subscribers come to stores to renew their contracts. Lastly, regarding their new products, BB is thought to be unveiling a few more products at their AGM in a couple of months time, which will likely give a breadth of consumers the option of a mid-cost BB experience, which will be key to unlocking profits and competing internationally with Nokia (NYSE:NOK) and Sony (NYSE:SNE) amongst the others previously mentioned.
3. Security, security, security. BlackBerry is king when it comes to security and everyone knows it. The ability for hackers to infiltrate cell phones is on the rise, and the issue of cyber security has risen to the likes of the President, Barack Obama, and his group of selected CEOs to discuss the matter. You ever wonder why top business executives, and heads of state use Blackberries? Companies have taken notice to their lack of security and have become defensive by bombarding consumers with commercials geared at altering their perceptions of security, most notable being a commercial that suggests a breach can only occur from within the company from a fellow colleague. One major breach to a competing company may swing investors and consumers to the BlackBerry, and the likelihood of a breach are steadily rising as the incentives increase (advent of mobile banking, and pay by scanning technology). This serves BlackBerry two ways, one it exposes other competitors and promotes the use of a secure BlackBerry platform, and two, the BlackBerry has recently teamed up with both Visa (NYSE:V) and MasterCard (NYSE:MA) to provide BB users the experience of a seamless payment at the till without the need to pull out their wallets. These are true testaments to BlackBerry and its ability to keep its user secure from hackers and the like.
4. Thursday, March 28th, 2013, is poised to be a day of volatile trading for BlackBerry. If you remember the 20% drop after the last quarterly, you can confirm the need for a strong stomach when your a fellow BlackBerry long. I do not suspect the same reaction this time around, as analysts have now come around regarding subscriber fees, by offering a variety of options to the user, Thorsten Heins may have actually increased the ease of signing a contract for a BlackBerry. At a time when competition as at its highest in the smartphone market, this move was brilliant. I would not stress regarding the upcoming quarterly, instead use this day as a win-win scenario, as I have in the past few trading days. If BlackBerry increases, fine, another "day at the office", as this increase is in line with our fundamental view and thesis regarding this comeback kid. If BlackBerry drops, increase your positions. This is what I call a win-win situation when you see BlackBerry at $25 by summer, if not higher. I suspect that 1 million users may have migrated, but we will see if February Z10 sales have defended our user base, if not added to it. If users have increased, watch out shorters, this stock will fly. This Thursday may mark a great day for us longs, but remember, sell of some other positions, deposit some money in time for the big day, or hold on for the ride up - either way, set yourself up for a win-win situation.
Hopefully I have re-inspired my fellow BlackBerry longs and maybe shed some light to those that are sitting on the sidelines wondering if this stock will go bankrupt (very unlikely) or continue to decline. To those on the sidelines and shorting the stock, I suggest initiating and covering your position in BlackBerry at the sub-$20 level. The BlackBerry Z10 and Q10, and future devices will take time to gain traction, do not expect this to come in one quarter. The good news will start flowing. Utilize the current volatility to buy on the dips. You will not regret it.
Disclosure: I am long BBRY, NOK, SNE, AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.