After crushingBlackBerry 's (
) shares for four years,
are gorging on the beleaguered smartphone stock, sending it 45%
higher so far this year.
Some analysts believe a multi-year turnaround led by former
Sybase CEO John Chen, who took the throne in November 2013, will
juice even bigger returns.
The tech giant, formerly known as Research In Motion, blasted
26% in just three sessions to a four-month high of 10.78
following major corporate news. Shares have nearly doubled off of
a 10-year low of 5.44 from December.
Short sellers buying back shares to close their trades have
driven a great chunk of demand. BlackBerry was one of the most
heavily shorted stocks last year. It's still 39% below its
The Waterloo, Ontario-based company announced Tuesday it's
selling most of its Canadian real estate for an undisclosed sum
to raise cash. The
Department of Defense
said last week that it plans to connect 80,000 BlackBerrys to its
new mobile system launching Jan. 31.
Citron Research report
released Friday is looking at a minimum price target of $15.
BlackBerry reinvented itself as an "enterprise software developer
with focus on mobile device management solutions," the report
notes. It's no longer an equipment company after selling its
money-losing handset unit to Foxconn. It's thereby eliminated
"device inventory risk" from its balance sheet, Citron's report
With nearly $3.45 billion cash on hand, BlackBerry has enough
money to carry out its turnaround plan and make the investments
needed for growth.
"With a competent executive team, strong product offerings,
ample cash to make investments and well-established existing
sales relationships with enterprise clients, there is little
reason to believe BlackBerry stands to lose the enterprise
(mobile device management) market," Citron wrote.
Most Wall Street analysts, on the other hand, have an
underperform, hold or neutral rating on the company, which
controls merely 2.8% of the global mobile phone market. S&P
Capital IQ forecasts revenue will drop 37% in fiscal 2014 and
another 35% in 2015, following a 40% decline in fiscal 2013.
S&P estimates per-share operating losses of $1.74 in 2014 and
$1.39 in 2015, following a per-share loss of 64 cents in
"Declining smartphone sales, stiff competition from handset
manufacturers, escalating marketing expenses and lukewarm
response for the new BB10 operating platform will continue to act
as head winds," Zacks Investment Research wrote in note Jan.
ETFs Holding BlackBerry
Investors who want to bet on the stock but have little
appetite for risk may nibble at it through an ETF. Only five
traded on the
have a stake in the Canadian firm, according to XTF.com.
IShares North American Tech-Multimedia Networking (
) has the most exposure with a 6% weighting in the stock.
First Trust Nasdaq CEA Smartphone Index (
), with a 5% weighting, holds 60 other names.
The other three ETFs have less than half a percent
weighting:RevenueShares ADR Fund (
),iShares North American Technology (
) andFidelity Nasdaq Composite Index (ONEQ).