BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares have gained 32% this year through yesterday. The stock jumped another 3.56% in pre-market trading Tuesday to $10.18 after reports that Ford Motor Company (NYSE:F) may ditch Microsoft Corporation (NASDAQ:MSFT) in favor of BlackBerry’s QNX OS. According to this chart by Eagle Bay Capital (via Business Insider), the ‘sell BlackBerry and buy Apple Inc. (NASDAQ:AAPL)’ trade has flipped. Shares of the iPhone maker are down 5.97% this year so far.
Wall Street notices improving sentiments around BlackBerry
Wall Street has definitely noticed improving sentiments around BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). Hedge fund manager Dan Loeb of Third Point revealed a 1.9% stake in the Canadian company. On the other hand, money is flowing out of Apple Inc. (NASDAQ:AAPL). J.C. Parets of Eagle Bay Capital told Business Insider that he believes the ailing smartphone maker has the potential to double its stock price. He said sentiment plays a crucial role. If investors believe that a stock is sinking, there comes a point when everybody with that belief has acted on it (sold the stock). That’s the case with BlackBerry. And then there are few sellers, with a large number of buyers. A good thing about this scenario is that the subsequent rally lasts longer, and goes beyond the standard uptrend.
Not too long ago, hedge funds loved shorting BlackBerry
Parets says we have seen the exactly opposite thing with Apple Inc. (NASDAQ:AAPL). All the big news around the company was priced in by the end of 2012. Now the trend is likely to see a reversal. According to a report by Goldman Sachs, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) was among the 50 stocks with a market value above $1 billion that hedge funds liked shorting the most. In the same report, Apple appeared on the VIP list.
FactSet data shows that the biggest 50 hedge funds raised their Apple Inc. (NASDAQ:AAPL) exposure by 3.6% during the fourth quarter. But the research firm pointed out that hedge funds have begun to lose interest in the iPhone maker since Carl Icahn dropped his proposal to squeeze the tech giant for another $50 billion buyback.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) launched two new smartphones Z3 and Q20 for Indonesia. These devices will be released in other countries at a later date.