Chris Lau, Kapitall: We've asked this before: are BlackBerry shares ripe for picking? Look to some Canadian tech stocks for ideas. BlackBerry ( BBRY ) shares are still in free fall. No one may guess when the decline will stop, since the company lacks many positive catalysts in the foreseeable future that would reverse the negative momentum. Read more on this topic from Kapitall: Are Blackberry Shares Ripe for the Picking Some reasons for the decline include:
- Weak sales for BB10 in the current quarter is almost certain.
- Delays by corporations installing BlackBerry Server software.
- And negative sales momentum for new products.
Anatomy of a turnaroundIf Blackberry can find the right mix of cost-cutting and sales, shares may be positioned to move up again. Other Canadian companies that turned their operations around had two things in common. First was cost cutting. Celestica ( CLS ) is an electronics manufacturing services (EMS) company that once made devices for BlackBerry. When that contract ended, the company drastically cut costs and found other sources of revenue. The second was the sale of non-core businesses. Sierra Wireless ( SWIR ) sold its wireless modem unit to focus on cloud solutions. Flush with cash from the sale, the company is now a mobile to mobile pure play. As a leader in this sector, Sierra now grows revenue and generates solid margins. And Mitel ( MITL ) was a $2.56 stock (at its yearly low) that traded recently at $8.40. The company repaid $20 million against its existing credit facility, and merged with its smaller rival, Aastra. The merger doubles revenue, with more than 54% of it coming from Europe, Middle East and Africa. Click on the interactive chart to see stock prices over time. BlackBerry does not have a smaller rival to acquire, but it could acquire mobile management companies, or spin off or have a joint-venture for its devices unit to become a more nimble company. Investors might expect BlackBerry to sell-off sharply again when the company reports on December 19. But then, this has been an uncertain quarter. BlackBerry’s ownership and future was uncertain, and sales were limited to unpopular Z10 and Q10 devices. Now that the company has new leaders firmly committed to selling secure phones and mobile management solutions for enterprise, will the decline end? (Written by Chris Lau, a Kapitall Contributor. Quarterly sales and stock price data sourced from Zacks Investment Research.)