Today's Perilous Reversal Stock: BlackBerry (BBRY)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified BlackBerry ( BBRY) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified BlackBerry as such a stock due to the following factors:

  • BBRY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $172.0 million.
  • BBRY has traded 2.8 million shares today.
  • BBRY is down 3.2% today.
  • BBRY was up 5.3% yesterday.

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More details on BBRY:

--The company has offices in North America, Europe and Asia Pacific. Currently there are no analysts that rate BlackBerry a buy, 8 analysts rate it a sell, and 20 rate it a hold.

The average volume for BlackBerry has been 25.3 million shares per day over the past 30 days. BlackBerry has a market cap of $4.7 billion and is part of the technology sector and telecommunications industry. Shares are up 20.7% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates BlackBerry as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • BLACKBERRY LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BLACKBERRY LTD swung to a loss, reporting -$1.20 versus $2.24 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 49000.0% when compared to the same quarter one year ago, falling from $9.00 million to -$4,401.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, BLACKBERRY LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$81.00 million or 108.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 33.39%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 28000.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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