All of the investors GuruFocus follows have reported their
fourth quarter portfolios, and the updates show that opinions
were split on the smartphone maker formerly known by the stock
symbol RIMM, Research In Motion (
BBRY
). While five funds slashed their holdings, one Guru didn't
change his large position, one almost tripled his holding and two
others increased their holdings.
The Company
Investors made their decisions regarding Research In Motion in
the months leading up to the Jan. 30 launch of its BlackBerry 10
smartphone. The company released two devices. The first, the all
touch-screen BlackBerry Z10, was available in the UK, Canada and
UAE, in February, and not in the U.S. until March. The second,
the Blackberry Q10, with a physical keyboard, will not appear
until April.
Shares lost 12 percent after the phone's debut, and have gained
almost 3 percent since the start of February as more information
has come to light. Without disclosing actual numbers, Research In
Motion CEO Thorsten Heins, announced on Feb. 6 that the previous
day was the best day ever for a BlackBerry smartphone launch, and
50 percent better than any of its other Canadian launches. In the
UK, the phone performed close to three times its best sales in
the first week of a BlackBerry smartphone launch.
Research In Motion, which has lost 85 percent of its market value
in the last five years as it was crowded out by competitors such
as Apple (
AAPL
) and Google (
GOOG
), has much riding on the success of the new phone model. It has
reported three consecutive quarters of net losses, and in the
third quarter, global subscriptions fell from 8 million to 7.9
million.
Thorsten Heins, who took over as CEO from founders Jim Balsillie
and Mike Lazaridis in January, reduced 5,000 jobs at the company,
aiming to save $1 billion, postponed the launch of the BlackBerry
10 until Jan. 30, supported it with a global marketing plan, and
pushed its older BlackBerry 7 sales with promotions before the
launch.
In spite of the business challenges, the company increased its
cash balance at the end of the third quarter to $2.9 billion,
from $2.3 billion the previous quarter, and increased cash flow
to $950 million from $432 million in the same time.
Guru Sells
The most substantial sale of Research In Motion was made by
Donald Yacktman
, manager of a $21 billion fund and previously BlackBerry's
fifth-largest shareholder, who approximately halved his holding
in the company in three of his funds. He has 21,825,212 shares
remaining, or approximately 4 percent of his funds.
Yacktman introduced the stock into one of his portfolios in the
second quarter of 2011, when the price was $44 per share on
average.
Though normally a long-term investor, he was most aggressively
buying in the fourth quarter, which began with the price near its
multi-year low, and ended with it up 58 percent. Yacktman said in
a CNBC interview he bought the stock below $7 and sold over the
course of the rally.
"We look at forward risk-adjusted rates of return, and this one
has a very wide range of potential outcomes," Yacktman commented
in
the interview
.
"The value side, the protection side, the cash the patents the
embedded base that was paying money to store information, as you
know that last leg has been thrown out and has in effect been
packaged in the price now. So they have in some degree bet the
ranch on this particular product. The product works, could be
very successful, on the other hand the backstop position is
probably lower and they would probably end up having to sell the
company, but it looks very promising," he continued.
The only other sizable Guru sale was from
Jim Simons
, who reduced almost 38 percent of his holding to 2 percent of
the company's shares, and runs most of his fund based on
mathematical algorithms.
Primecap Management reduced 0.58 percent of its holding, and is
hanging on to just over 5 percent of the company's shares.
Guru Holders
Prem Watsa
, whose Fairfax Financial Holdings (
FFH
) is the largest BlackBerry shareholder, with a 9.89 percent
stake, neither reduced nor increased its holding in the fourth
quarter. Watsa had just purchased more than 25 million shares -
almost doubling his stake - in the third quarter, during which
the price tumbled to its multi-year low.
Guru Buyers
The fourth quarter's low price and immediate rally in the fourth
quarter attracted a number of shrewd value investors. Andreas
Halvorsen, who runs $13.8 billion Connecticut-based Viking Global
and is a Tiger alumnus, increased his position by more than 247
percent in the fourth quarter. Because he started his position in
the third quarter of 2012, Halvorsen has an approximate 57% gain
on average on BlackBerry. As of the end of the fourth quarter, he
owns almost 16 million shares, or a little over 3 percent of the
company.
Jeremy Grantham, who has invested in the company since before
2008, made his largest increase to it in a year, buying 895,200
shares in the fourth quarter, his ninth consecutive quarter of
buying shares.
Joel Greenblatt purchased 43,171 shares, building his position to
195,701 in total, representing less than 1 percent of his
portfolio and the company.
To see more about BlackBerry, visit its 10-year financial page
here. Also, see the portfolios of Donald Yacktman, Prem Watsa and
Andreas Halvorsen.About GuruFocus: GuruFocus.com tracks the
stocks picks and portfolio holdings of the world's best
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