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Citron Research: BlackBerry Worth $20 Based on Potential Success in 'Internet of Things'
A bullish report is pushing shares of the embattled smartphone maker higher.
Michael Comeau    

This article was originally posted on the Buzz & Banter, where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

This morning, Citron Research issued a report on BlackBerry (NASDAQ:BBRY) that is having a very positive impact on the stock.

Citron raised its target price on BlackBerry to $20, calling it 'Our Best Idea in YEARS' based upon the company's potential to succeed in the Internet of Things, which I discussed yesterday in less detail.

Here are the main points of Citron's case:

1. By 2020, there will be 50-75 billion 'connected things', according to SAP (NYSE:SAP).

2. BlackBerry has an unparalleled reputation for delivering large quantities of data on an end-to-end secure platofrm, and the success of its QNX platform within cars is a good example of real-world viability.

3. Being Canadian means the company may be beyond the NSA's influence, which could mean easier relations with foreign customers and governments.

4. BlackBerry has a $3.2 billion enterprise value, while Google (NASDAQ:GOOG) paid $3.2 billion for Nest, and Apple (NASDAQ:AAPL) paid $3 billion for Beats.

5. The 19% short interest and $5 per share in hard assets on the balance sheet could help reduce downside risk.

6. There are a host of potential acquirers, including Microsoft (NASDAQ:MSFT), GE (NYSE:GE), Intel (NASDAQ:INTC), and IBM (NYSE:IBM).

My Take

I'm not long yet, but BlackBerry is turning into a very interesting stock.

It's not because of Project Ion's (the name for its Internet of Things program) actual capabilities.

The real bull case for BlackBerry is that tech investors could pile into the stock as an Internet of Things play, creating a short squeeze.

BlackBerry doesn't have to succeed for the stock to go up -- investors simply have to think that it can. The low valuation (~0.7X sales) implies zero expected growth. The emergence of the Internet of Things as an investment theme could change those expectations very quickly, regardless of what the future actually holds.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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Position in AAPL
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Citron Research: BlackBerry Worth $20 Based on Potential Success in 'Internet of Things'
A bullish report is pushing shares of the embattled smartphone maker higher.
Michael Comeau    

This article was originally posted on the Buzz & Banter, where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

This morning, Citron Research issued a report on BlackBerry (NASDAQ:BBRY) that is having a very positive impact on the stock.

Citron raised its target price on BlackBerry to $20, calling it 'Our Best Idea in YEARS' based upon the company's potential to succeed in the Internet of Things, which I discussed yesterday in less detail.

Here are the main points of Citron's case:

1. By 2020, there will be 50-75 billion 'connected things', according to SAP (NYSE:SAP).

2. BlackBerry has an unparalleled reputation for delivering large quantities of data on an end-to-end secure platofrm, and the success of its QNX platform within cars is a good example of real-world viability.

3. Being Canadian means the company may be beyond the NSA's influence, which could mean easier relations with foreign customers and governments.

4. BlackBerry has a $3.2 billion enterprise value, while Google (NASDAQ:GOOG) paid $3.2 billion for Nest, and Apple (NASDAQ:AAPL) paid $3 billion for Beats.

5. The 19% short interest and $5 per share in hard assets on the balance sheet could help reduce downside risk.

6. There are a host of potential acquirers, including Microsoft (NASDAQ:MSFT), GE (NYSE:GE), Intel (NASDAQ:INTC), and IBM (NYSE:IBM).

My Take

I'm not long yet, but BlackBerry is turning into a very interesting stock.

It's not because of Project Ion's (the name for its Internet of Things program) actual capabilities.

The real bull case for BlackBerry is that tech investors could pile into the stock as an Internet of Things play, creating a short squeeze.

BlackBerry doesn't have to succeed for the stock to go up -- investors simply have to think that it can. The low valuation (~0.7X sales) implies zero expected growth. The emergence of the Internet of Things as an investment theme could change those expectations very quickly, regardless of what the future actually holds.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
Position in AAPL
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
More From Michael Comeau
Citron Research: BlackBerry Worth $20 Based on Potential Success in 'Internet of Things'
A bullish report is pushing shares of the embattled smartphone maker higher.
Michael Comeau    

This article was originally posted on the Buzz & Banter, where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

This morning, Citron Research issued a report on BlackBerry (NASDAQ:BBRY) that is having a very positive impact on the stock.

Citron raised its target price on BlackBerry to $20, calling it 'Our Best Idea in YEARS' based upon the company's potential to succeed in the Internet of Things, which I discussed yesterday in less detail.

Here are the main points of Citron's case:

1. By 2020, there will be 50-75 billion 'connected things', according to SAP (NYSE:SAP).

2. BlackBerry has an unparalleled reputation for delivering large quantities of data on an end-to-end secure platofrm, and the success of its QNX platform within cars is a good example of real-world viability.

3. Being Canadian means the company may be beyond the NSA's influence, which could mean easier relations with foreign customers and governments.

4. BlackBerry has a $3.2 billion enterprise value, while Google (NASDAQ:GOOG) paid $3.2 billion for Nest, and Apple (NASDAQ:AAPL) paid $3 billion for Beats.

5. The 19% short interest and $5 per share in hard assets on the balance sheet could help reduce downside risk.

6. There are a host of potential acquirers, including Microsoft (NASDAQ:MSFT), GE (NYSE:GE), Intel (NASDAQ:INTC), and IBM (NYSE:IBM).

My Take

I'm not long yet, but BlackBerry is turning into a very interesting stock.

It's not because of Project Ion's (the name for its Internet of Things program) actual capabilities.

The real bull case for BlackBerry is that tech investors could pile into the stock as an Internet of Things play, creating a short squeeze.

BlackBerry doesn't have to succeed for the stock to go up -- investors simply have to think that it can. The low valuation (~0.7X sales) implies zero expected growth. The emergence of the Internet of Things as an investment theme could change those expectations very quickly, regardless of what the future actually holds.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
Position in AAPL
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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