Jim Simons (Trades, Portfolio) and PRIMECAP Management are adding to their positions in BlackBerry (BBRY, Financial), despite the fact that the stock has been on an average yearly decline of 33% over the past seven years.
Simons graduated from MIT in 1958 and went on to pursue a Ph.D in mathematics from the University of California, Berkeley in 1961. He then went on to serve for the U.S Department of Defense as a codebreaker during the Vietnam War. After the war, Simons founded Renaissance Technologies in 1982, which he ran for 28 years before retiring in 2010. He still continues to work for the fund helping to improve the company's mathematically-based Medallion system.
In the third quarter of 2015, Simons added 306,725 shares of BlackBerry Ltd. for a 9.29% increase in the holding. He now owns 3,609,402 total shares.
BlackBerry, formerly known as Research In Motion, was founded by Mike Lazaridis and Douglas Fregin in 1984 in Waterloo, Ontario. The company has since expanded across North America, Europe, Asia Pacific and Latin America. The company was thriving back in 2008, peaking at a price of $140.48. Today, however, the company is trading at $8.61 per share.
The company began to lose momentum when Steve Jobs and Apple (APPL) released the game-changing iPhone in January 2007. Jobs and Apple would completely revolutionize the mobile phone industry. But in 2008 Blackberry hit its highest peak on the Nasdaq, trading at just over $140 per share. Since then they have released products that do not measure up to Apple's iPhone or iPad, and their shares have been on a steady decline. In January 2012, co-founder Mike Larzridis stepped down after facing fierce criticism for the company falling into hard times.
One of the biggest reasons for the drop in sales was the company's release of the Z10 phone. The Z10 phone was crushed by the competition and by the second quarter of 2012, BlackBerry had fired 5,000 employees, or nearly one-third of its workforce, and had a half billion dollar quarterly loss.
Thorsten Heins took over as CEO and was eventually replaced by John Chen in November 2013.
Since Chen has become the CEO, the company has started to gain a little bit of momentum.
There are a few good signs with BlackBerry:
- They have very secure encryptions that thousands of companies use around the world to protect their business data.
- They have BBM messaging services, which are protected with enhanced security.
- They’re working hard on producing new and improved products like smartphones and device software.
- The company has been rising in price in the fourth quarter.
PRIMECAP Management has also added 4,328,650 shares of BlackBerry in the third quarter for a 6.23% increase in their holding. The firm now owns 72,553,007 total shares in BlackBerry.
PRIMECAP is an independent investment management company. The firm’s goal is to provide superior long-term equity investment results by following an investment approach based on four key principles: commitment to fundamental research, long-term investment horizon, emphasis on individual decision-making and focus on value.
Both of these gurus believe in the long-term prospects of BlackBerry; we’ll just have to see if they’re right.
Disclaimer: The author does not own any shares of BlackBerry.
Cheers to your investment success.
