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Summary
- Stocks of Bombardier Inc (TSX: BBD.B) and BlackBerry Limited (TSX:BB) have remained in fervor with investors this year.
- Bombardier shares’ 10-day average trading volume is 6.1 million, despite 80 per cent YTD scrip price devaluation.
- Blackberry stock lost 23 per cent value this year and its 10-day average trading volume is 1.5 million.
The coronavirus pandemic-led market crash has upended the stock markets. Nearly seven months after the pandemic struck, companies are still trying to get back on their feet. While some sectors – especially gold and tech stocks – managed to weather the turbulence well, other sectors were not so lucky. However, stocks of Bombardier Inc (TSX: BBD.B) and BlackBerry Limited (TSX:BB) have remained in fervor with investors this year, despite their year-to-date scrip price devaluation.
Currently priced below C$1, Bombardier stocks are being lapped up by investors. Blackberry stocks, too, are priced at an attractive valuation of under C$7. While it is hard to predict the market movements, figures point that the economy is slowly reviving.
Keeping those pointers in minds, let’s delve into the performance of the two stocks:
Bombardier Inc (TSX: BBD.B)
Current Stock Price: C$ 0.36
Bombardier is a Canada-based manufacturer of transportation solutions such as planes and trains with clients spread across the globe. The company’s stock price has shelved over 80 per cent year-to-date (YTD). Bombardier stocks declined almost 15 per cent in the last three months, and six per cent in one month.
Despite the free fall of Bombardier stocks this year, the shares’ 10-day average trading volume is 6.1 million. As per data on the Toronto Stock Exchange, the company’s current market capitalization is C$ 766 million, price-to-cash flow ratio is 12.40 and the return on equity is 32.53 per cent. Bombardier had scrapped its dividends payout in 2014.
Once a tall performer among industrial stocks, Bombardier’s scrips have steadily lost value in the last two years. In the second quarter financial results 2020 (ended June 30), the company’s revenue dropped 37 per cent year-on-year (YoY) to US$ 2.7 billion from US$ 4.38 billion in Q2 2019. This was primarily due to suspension of operations and low production activities and deliveries. Bombardier halted key aircraft operations due to the pandemic. Adjusted EBITDA stood at negative -US$ 319 million, down from US$ 312 million same quarter last year.
(Source: Bombardier / Image: Kalkine Media)
Bombardier’s woes arrived long before the COVID hit the markets. The Montreal-based manufacturer had offloaded its Q and C Series Aircraft programs and cancelled the Learjet 85 aircraft program. It sold its rail equipment production business to French train manufacture Alstom SA. Bombardier will receive net proceeds of ~US$ 4.0B at closing the sale in the first quarter of 2021. It also sold its CRJ Series aircraft program to Mitsubishi Heavy Industries. Bombardier also let go of nearly 2,500 workers amid pandemic.
The company has now shifted focus on private business jets, presenting the first Global 7500 aircraft in August. The aircraft boasts of dual head-up display and has additional safety features.
BlackBerry Limited (TSX:BB)
Current Stock Price: C$ 6.43
Blackberry ranks on TSX’s Top Tech Stocklist, a list of TSX and TSXV tech stocks with highest price gains in 30 days. In the last 30 days, its share price is up by C$ 0.30.
Blackberry stock lost 23 per cent value this year. Following the pandemic-led market crash in March, the stocks recovered 31 per cent in the last six months. However, the scrips are down nearly 8 per cent in three months. In the last one month, Blackberry stock has gained about 2 per cent.
As per data on the TSX, Blackberry’s current market capitalization is C$ 3.6 million and price to book ratio of 48.80. Its 10-day average trading volume is 1.5 million while 30-day average trading volume is 1.58 million.
Once a giant in the smartphone segment, Blackberry’s fortune dwindled with the rise of Apple and Android phones. Its scrip value crashed as swankier handsets became a rage in the market and the company stared at potential closure.
At this juncture, Blackberry turned its focus on security – a key feature of its phones. Over time, Blackberry became a leading cybersecurity firm, turning around its sop story into success.
Some of its clients include the US Airforce, Saudi Financial Company, Vodafone, Intel and Amazon.
Blackberry announced the launch of its AtHoc Public Safety edition program that helps governments and varsities deliver critical communications directly to the public through secure manner. It partnered with telecommunications company Telus to further resell the public safety solution to organizations across Canada.
A Frost & Sullivan report in June claimed that BlackBerry can secure all Internet of Things (IoT) endpoints and addresses nearly 96 per cent of all cyberthreats. Its QNX Software is embedded in over 175 million vehicles.
The report further said global cyber-crime related costs will touch US$ 5 trillion in 2020, while IoT devices will rise to 67 billion devices by 2025. These swift growth numbers will also see the cyberattack surface area expand by an overwhelming amount, it added.
Despite the encouraging figures, Blackberry was impacted by the ongoing pandemic, which reflects in its first quarter fiscal 2021 report (ending May 31, 2020). The company’s top line decreased to US$ 206 million, from US$ 247 million in Q1 fiscal 2020. The net loss grew to US$ 636 million in Q1fiscal 2021 from US$ 35 million in same quarter last year.
Blackberry will report its second quarter fiscal year 2021 results on September 24, 2020.
