BlackBerry shares are surging – just in time for RRSP season

TORONTO – Don’t look now but BlackBerry has quietly become somewhat – we stress, somewhat – of a stock market darling again.

Shares in the beleaguered Canadian smartphone maker have rallied more than 40 per cent in the past month, as BlackBerry has retooled its leadership team and won over some new contracts.

BlackBerry’s stock received another boost Tuesday when the company announced plans to sell its Canadian real-estate holdings, a move that will generate potentially hundreds of millions of dollars to help fund a turnaround.

Some experts are lining up behind the Waterloo, Ont., company once more following the appointment of John Chen, an executive with firsthand experience in pulling a sinking company from the flames.

Chen is stocking the company’s senior ranks with a new team (see here and here) who are about as seasoned as it gets in the software and wireless industries.

READ MORE: BlackBerry’s $4.4 billion bombshell

The new guys represent a sharp break from the old guard, which under Thorsten Heins, pressed on with a plan to launch a make-or-break BlackBerry 10 lineup that experts say meekly followed in the footsteps of its competitors, a strategy that unsurprisingly failed.

In contrast, Chen is moving boldly and aggressively on a number of new fronts, experts say.

“Unlike the prior management team, which bet the farm on a failed device, the new executive team is taking a pragmatic approach to stabilizing the challenged handset business, charting a course towards financial break-even metrics and working to differentiate its products and services,” Mark Sue at RBC Capital Markets said in a note earlier this month.

For those looking to catch the wave by purchasing some shares, we asked a few in the know whether we should be loading up on BBRY stock in our RRSPs ahead of the March 3 deadline. Here’s what we got:

“While John Chen has outlined some positive first steps, we are taking a wait-and-see approach,” Todd Coupland at CIBC told his clients last month.

Coupland said he wants to see stronger uptake of devices among corporate clients – BlackBerry’s core customer base and one Chen is aggressively refocusing the company on.

A contract with the U.S. Defense Department announced this week is exactly the kind of deal experts who cover the stock want to see more of. (BlackBerry’s shares are up another 8.0 per cent today on that news, by the way.)

Another estimate from experts at Citron Research says shares, which are now trading at just under $10 apiece, could reach $15.

“BlackBerry has a healthy balance sheet, with ample liquidity to execute its turnaround strategy and make the necessary investments for growth,” according to the report.

Of course, there is still no shortage of uncertainty over whether Chen can stabilize still-falling handset sales while getting long-term goals off the ground; gaining traction for BlackBerry’s device management business beyond its own handsets, as well as actually generating meaningful revenue on its secure BBM messaging service.

“The company has significant long-term challenges,” RBC’s Sue said.

“The stock is highly speculative,” Kris Thompson, an analyst at National Bank, added in an email.

The company doesn’t expect to be back at break-even — meaning generating enough sales to offset how much money it spends on day-to-day operations — until the end of next year, and will begin earning a profit by 2016, Thompson said.

“Betting your retirement on these parameters would be reckless.”

There you have it.

And of course, any stock is an inherently risky investment that investors and savers should consider seeking accredited advice on before buying, experts say.