BlackBerry stock witnessed an unusually large amount of options trading on Monday. Investors acquired 24,357 put options on the Canadian firm, which is an increase of 126% compared to the average daily put options of 10,777.
BlackBerry could go for acquisitions?
CEO John Chen has somewhat steered the company to stability as it presently sits on its largest cash pile ever at $3.2 billion. There are views that the Canadian firm could use the cash to fund acquisitions. In the past year or so, BlackBerry has done a few acquisitions to expand its overall offering package to clients, but there remains room for more.
As of now, BlackBerry is viewed as predominantly a hardware firm, but going forward, as has been asserted by Chen himself, the company expects software growth on the back of future acquisitions. BlackBerry is viewed in high regard by enterprise and government customers, which provides the Canadian firm an opportunity to take advantage of “critical gaps in security, device management, and other software services at the corporate level is critical,” says a report from Seeking Alpha.
In turnaround phase
BlackBerry, which is in the process of a turnaround, hit its lows in late 2013. However, after Chen took over as CEO, a lot of changes have been introduced to make the company more trim and focused. The balance sheet of the Canadian firm is also in much-better shape now with US$500 million in net debt, equaling 10% of the company’s market cap, says a report from Motley. Chen, who is known as a turnaround specialist, enjoys the backing of investors and analysts.
In recent weeks, many analysts have released their verdicts on BlackBerry. In a research note on March 31, analysts at MKM Partners raised their rating on the stock to Neutral and assigned a $10 price target. Analysts at Scotiabank, in a research note also on March 31, raised their price target on the Canadian firm to $12.50 and gave the company a Sector Perform rating. Separately, Deutsche Bank raised its rating on BlackBerry to Hold with a price target of $9 in a research note on March 31. Also analysts at BGC Financial set a $12.50 price target and gave a Buy rating to the stock in a research note on March 31. Presently, BlackBerry has an average rating of Hold and an average price target of $9.87.