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Sydnee Gatewood
Sydnee Gatewood
Articles (3340) 

David Herro Comments on BlackBerry

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January 13, 2021 | About:

BlackBerry (TSX:BB), a Canadian software and services technology firm, was one of the largest contributors to the Fund's return for the fourth quarter. The company's share price surged early in December on news that management signed a multi-year agreement with Amazon to develop and market an intelligent vehicle data software platform called IVY. Cloud-connected IVY enables auto manufacturers to securely and consistently collect standardized data from vehicle sensors to improve performance and develop new value-enhancing features and services for drivers. This product will not arrive in vehicles before 2023, but we believe it has the long-term potential to buttress BlackBerry's strong position in automotive software with a potentially dominant data platform. The company's core operations continue to progress in line with our turnaround expectations as BlackBerry firms its new product lineup and realigns its sales force. Recent-quarter results were slightly ahead of market forecasts, but continue to be negatively impacted by Covid-19, with year-to-date sales down 13%. The company is delivering on cost control, driving a 177% rise in EBITDA and positive year-to-date cash flow. CEO John Chen anticipates that the restructuring of the sales force and the lineup of new product launches will drive strong growth for the company in the coming year. We believe that these factors, as well as the longer term opportunities represented by IVY, continue to make BlackBerry an attractively valued holding.

From David Herro (Trades, Portfolio)'s Oakmark Intl Small Cap (Trades, Portfolio) Fund fourth-quarter 2020 shareholder commentary.

About the author:

Sydnee Gatewood
I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

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