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BlackBerry: Venice Device Will Spur Regrowth

The year is 2007, and Apple (NASDAQ:AAPL) has announced to the world the soon-to-be iconic iPhone device. At the time, BlackBerry (NASDAQ:BBRY) is in euphoria with its stock price hovering above $140 per share and is a powerhouse in the smartphone market. However, Apple’s iPhone focused on catering to the consumer and not just business professionals, giving them a competitive edge over Blackberry. Fast forward to 2015: the name BlackBerry has hardly any connotation with the smartphone industry while Apple has 36.7% market share. But BlackBerry now has several developments in the pipeline and with its stock priced at a mere $7.34 at the time of this writing, I Know First believes that BlackBerry is a stock worth holding onto over the long-term.

Android: The World’s Most Popular Mobile OS

The company started off as being a pioneer in the smartphone industry. However, today it is far from that, holding only a 0.3% estimated global smartphone market share by the year 2018. The company has diversified its core business strategy and now heavily relies on software and service revenue streams. But that is not to say that BlackBerry has completely abandoned its mobile phone business.

Over the past several years the company has released successful smart phone models, with the Passport and the Classic being prime examples of such. In both of these models the iconic pull-out BlackBerry mini keyboard is installed and ran on a BlackBerry operating system. Although the phone was reliable and excelled in performance, there was not a sufficient volume of purchases made and thus BlackBerry did not penetrate the smartphone market even in the slightest. Many argue that the poor commercial success was due to the brand-developed operating system, which has a poor app selection and is under-supported. It is for this reason the forefather of palm mobile phones has turned to the innovative, Google owned Android operating system.

An opportunity exists for BlackBerry, as the company has expertise in the keyboard phone market, of which supply is limited. And if teaming up with Android will eliminate the consumers’ disappointment of BlackBerry’s proprietary OS, the success could be outstanding. The company’s main way in which it locks in customers is through its keyboard and messenger services. Thus, by delivering a phone that is powered by the popular OS, it will give former users a way to come back without sacrificing anything.

Although no official comment has been made by BlackBerry, blogger and writer Evan Blass tweeted a photo of the phone, dubbed Venice.

Source: Evan Blass; @evleaks, Tweeted 19th August

Although this flagship project does not compare in magnitude to Apple’s crowned jewel iPhone, it still shows the company will not crumble against the likes of such powerhouses.

India

BlackBerry received criticism in a recent article by released by the India Economic Times, which highlighted the company’s falling market share and its supposed inability to compete with India’s market leaders. However, BlackBerry reacted furiously to the claims, suggesting that the article did not mention any of the positive development the company has achieved.

A statement released by the firm said, “It [the article] fails to capture the broader context: how BlackBerry is in the middle of a significant transition.” In the official blog post released by the information technology company, they said that the Economic Times ignored the fact that they have expanded their software development. The company boasted how its BES12, a endpoint-permissions model that lets you manage devices, apps and data, has got a significant clientele in India, with Essar Group being a dominant user.

The mobile phone company concluded its post by saying that the company is committed to giving users the ultimate security and privacy.

Furthermore, adding that “We may look different than the BlackBerry of old, but make no mistake – we aren’t feeling blue: these are very exciting times for BlackBerry, and India is very much a part of our plans today and in the future.”

However, one should not be too optimistic about BlackBerry’s Indian development, as it is thought the company that used to boast many engineers in India now has only 15 employees heading the Indian operations.

Security space

BlackBerry has joined the National Cyber Security Alliance (NCSA), showing the company is a pivotal force in the mobile security software sector. NCSA is a non-profit public-private body that concerns itself with a mission to promote online safety and security, which has become extremely important in recent years due to the numerous online security leaks.

The mobile giants said, “we’re reinforcing our commitment to keep data secure and information private by announcing that we’ve joined the (NCSA) in the United States”. The NCSA includes players from financial services, media, and the tech sector.

The U.S. Department of Homeland Security is also a key player in the NCSA. The firm says it has “been doing mobile security longer and better than anyone else, and we’re at the forefront of making sure that data remains secure as new threats”.

CEO John Chen believes that the firm is doing what it knows how to do in keeping mobile secure and private. He went on to describe how BlackBerry has become a leader in the mobile security space, highlighting how the company has invested more than $100M in building its security segment over the last year, including major deals with the likes of WatchDox, Movirtu, Secusmart and AtHoc.

The company increasing its established position in the security space is logical due to the company’s increasing number of high profile clients. Chen demonstrated this by saying that “all of the G7 and 16 of the G20 governments trust us with their mobile communications. Our security platform is proven but we are continuing to innovate to keep data secure and information private.”

The Morgan Stanley Boost

Last month, the leading investment firm upgraded the company from underweight to equal weight and maintained their $7 price target. at the time of announcement shares soared by 4.67% to $7.62. The announcement by Morgan Stanley resulted in BlackBerry stock increasing by the biggest margins in six months. Morgan Stanley noted that the strength of the smartphone maker’s cash reserves and ability to further cut costs were pivotal reasons for its decision.

Although not all analysts are as optimistic, with many arguing that there has been no fundamental business turnaround.

According to Yahoo! finance, the company’s target price is $8.77 and the median target price is $9.00, both significantly higher than the current share price of $7.34. I do believe these targets will be matched in the upcoming future.

Algorithmic Analysis

I Know First supplies financial services, mainly through stock forecasts via theirpredictive algorithm. The algorithm incorporates a 15-year database, and utilizes it to predict the flow of money across 2000 markets. The self-learning algorithm uses artificial intelligence, predictive models based on artificial neural networks, and genetic algorithms to predict money movements within various markets.

The algorithm produces a forecast with a signal and a predictability indicator. The signal is the number in the middle of the box. The predictability is the number at the bottom of the box. At the top, a specific asset is identified. This format is consistent across all predictions. The middle number is indicative of strength and direction, not a price target. The bottom number, the predictability, signifies a confidence level.

I Know First has had success predicting the behavior of BlackBerry’s stock performance in the past. This 7-day “Stocks Under 10 Dollars” forecast from August 24th included BlackBerry in the top 10 stocks for the long position. It had a signal strength of 24.26, and the stock price increased 6.15% during the predicted time period as the algorithm predicted.

BBRY stock predictions

I Know First published a bullish forecast on BlackBerry, a Canadian telecommunication and wireless equipment company, on Seeking Alpha. Having explained how I Know First’s algorithm works, it is worthwhile to see if the algorithm agrees with the bullish fundamental analysis of the company. The three-month and one-year forecasts for BlackBerry are included.

BlackBerry Stock Predictions

BlackBerry is among the top stock picks for both time horizons. The stock has a strong, bullish signal for both, indicating that the stock is currently very undervalued. Over the predicted time horizons, the stock is currently undervalued, which is in support of the fundamental analysis. The Canadian company are set to introduce a new Android powered phone and as well as diversifying into the security space industry.

Positive signal strength does not mean investors should automatically buy the stock. Dr. Roitman, who created the algorithm, created rules for entry for a stock such as BlackBerry. Using this trading strategy, an investor should buy a stock if the last 5 signal strength’s average is positive and if the last closing price is above the 5-day moving average price. When both of these conditions are met, it is a good time to initiate a position in the stock.

Conclusion

It seems BlackBerry management has come to terms with the reality that it will find it difficult to compete against the likes of Apple and Samsung in the smartphone industry. Although they are looking to re-enter the market with their Android device, the company is keen on diversifying itself into the security space industry, where its success will be vital in building the company’s long term future. Furthermore, with its expansion into the Indian market and Morgan Stanley’s upgrade, I believe BlackBerry is looking at a bright future. Additionally, the firm now has positive cash flow, has stable revenue, and can now concentrate on working towards building growth. The company was once a front-runner in the mobile smartphone market and now with unbelievably low share prices, buying the stock is currently a bargain.

The I Know First’s algorithmic analysis mirrors the bullish stance that the company is showing. The indicators throughout this article suggest that BlackBerry will be of long term value in the future, and is a stock investors should consider purchasing.

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I Know First is a financial services firm that utilizes an advanced self-learning algorithm to analyze, model and predict the stock market. Co-Founder Dr. Lipa Roitman, a scientist, with over 20 years of experience created the market prediction system. The algorithm is based on artificial intelligence, machine learning and incorporates elements of artificial neural networks as well as genetic algorithms to model and predict the flow of money between 2,000 markets from 3-days to a year: stocks, ETF's, world indices, gold, currencies, interest rates, and commodities. The algorithm outputs a predicted trend as a number, which in turn, is used by traders to identify when to enter and exit the market. While forecasts can be used for intra-day trading, the predictability tends to become stronger over longer time-horizons such as the 1-month, 3-month and 1-year forecasts. Visit us at iknowfirst.com

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