Francis Chou Triples His Stake In BlackBerry Ltd

Francis Chou Triples His Stake In BlackBerry Ltd

The form 13 F filing for the quarter ended on 31 December 2013 for Chou Associates Management Inc. reveals that the value fund hiked its holding in struggling smartphone maker BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) from 185,000 shares to 529,040 shares. That brought BlackBerry up to to 1.19% of Chou’s portfolio.

The Chou fund brings a value-oriented approach to investing with special emphasis on balance sheet analysis and a long-term view rather than short-term market factors. Funds typically restrict their portfolio to 20 to 35 companies per fund portfolio and their longer-term horizon achieves low portfolio turnover, reduced transaction costs and staggered impact of capital gains.

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BlackBerry revenues down, but earnings beat consensus

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) reported recently that its revenue for the fourth quarter of fiscal 2014 was $976 million, a fall of 64% compared to the year ago period, and down 18% from the previous quarter. Quarterly revenue was 56% from services business, 7% from software and only 37% from the hardware business (BlackBerry smartphones).

However, the company managed to beat analysts’ expectations by reporting a loss of $0.08 per diluted share compared to consensus of $0.57.

“We have significantly streamlined operations, allowing us to reach our expense reduction target one quarter ahead of schedule,” Chief Executive John Chen said. “BlackBerry is on sounder financial footing today with a path to returning to growth and profitability.”

Resuscitation measures

John Chen has been vocal about his ambitions for BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) to focus on specialist enterprise users in industries such as finance, insurance and government, which place a premium on the company’s reputation for its security and encryption technologies.

In other measures to revive the company, Chen is attempting to milk the company’s BlackBerry Messenger (BBM) for higher revenues, jettison surplus real estate and bring back some of the much-loved features of older BlackBerry handsets such as a physical trackpad and menu buttons.

Analysts’ ratings

Analysts at UBS assigned BlackBerry a Neutral rating, but upped their price target from $8.00 to $8.50 per share last month. Canaccord Genuity also maintain a Hold rating on the company and recently boosted their price target to $8.00 a share.

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) closed at $8.00 even in trading on Friday.

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Saul Griffith is an investor in stocks, commodities and forex, writing under a pen name. Saul has top accounting qualifications and extensive experience in industry and the financial markets. He also has an abiding interest in breaking news that could be a harbinger of new trends and give insight into an instrument’s potential for providing value, growth or yield.
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  1. to DEVVV: As usual, your comment makes No Sense Whatsoever.

    to ValueWalk: you write “struggling smartphone maker BlackBerry Ltd”. First of all, Blackberry is way more than a smartphone maker. Second, it’s (more than) high time to let go of the adjective “struggling”. Is there some kind of weird auto-type feature in your editorial offices that automagically inserts “struggling” every time you type BlackBerry??? Enough already!!!

  2. The idea of investing in something is if their products are selling. Now that it appears Microsoft is working with Apple, pertaining to offering Microsoft windows office on the Ipad platform. This leads me to believe the ipod is completely Enterprise ready,due to this.

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