With the 28 of June approaching it is time to think about managing a BBRY shareholding. One way to do this is to consider market reaction to various Q1 earnings levels which I choose to believe will be positive, an assumption which can soon be verified by linking to the BBRY site now for the broadcast and report.
For background, I am a BBRY long and am about 2.5 times overweight in my BBRY holdings. I am not an investment professional. I do not offer advice but want to seek alpha by discussion with my fellow shareholders.
BBBY reports good earnings for Q1, share price spikes modestly but the market continues to shake following the earnings report.
|JUNE 27||Q1 EPS||JULY 10(?)||OCT28|
|Short term spike||Short term recovery @50%||
The timing is variable, I read the chart as BBRY closes @$15 on June 27, reports earnings of say $.50 per share so I expect a spike to $22 and might sell half my holdings at $21 then re-buy at $19 for a run up to $25 by the time Q2 reports. If BBRY closes @$16 on June 27 earnings results are likely to be magnified.
The question is is the game worth the candle considering how quickly BBRY might move?
Quarterly results should always be seen in the context of the longer term prospects for the firm. I see these as follows:
- The Q10 and Z10 are selling well but are first efforts with QNX which remains BBRY's unique value proposition. The Aristo will iron out the Q10 issues-possibly screen size.
- BES and channels will become standards for communicating to teams and knowing they 'read the message'.
- The banking transaction business will come on stream.
- The VOIP experiment in the mid-east will be successful and expand to other international markets.
- BBRY developers will continue to develop tools to assist organizations but will lag with movies and 'graphic novel' applications.
- Competition remains fierce but the market is growing.
BBRY stock price movement remains volatile muted somewhat by high volume options trading. The overall trend remains up since the company is now focused on its unique value as an organizational communications tool.
Q1 earnings will be a key to confirming the turnaround. BBRY Q1 will be better than expected. This will provide them with the time to implement mobile organizational communications solutions. The stock price will continue to increase longer term but market volatility may provide some trading opportunities in the near future.
So tell me what is the best way to make money here?
Disclosure: I am long BBRY.