You probably think that hedge funds’ long picks aren’t beating the market because of their high profile losses in Valeant or energy stocks. You’d be wrong. We track more than 800 equity hedge funds and create a giant portfolio of their long holdings. This $1.6 trillion portfolio of large and small-cap stocks lost 4.7% through the end of February, which outperformed the S&P 500 Total Return Index’s 5.2% loss. The small-cap index Russell 2000 did even worse, losing 8.8% during the same period. In this article, we are going to take a look at the hedge fund sentiment surrounding Blackberry Ltd (NASDAQ:BBRY).
Is Blackberry Ltd (NASDAQ:BBRY) the right investment to pursue these days? Investors who are in the know seem to think so. The number of long hedge fund positions in the stock was up by 33% during the fourth quarter. BBRY was in 24 hedge funds’ portfolios at the end of the fourth quarter, with those positions being valued at over $786 million. There were 18 hedge funds in our database with BBRY positions at the end of the previous quarter, when their stakes amounted to just $470 million in shares. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Neurocrine Biosciences, Inc. (NASDAQ:NBIX), Old Republic International Corporation (NYSE:ORI), and Envision Healthcare Holdings Inc (NYSE:EVHC) to gather more data points.
Why is Smart Money Growing Fonder of BlackBerry Ltd (NASDAQ:BBRY)?
After a strong close to 2015 which saw its shares gain 50% and prompted the aforementioned influx of smart money into the stock, BlackBerry has fallen victim to the broader tech and market selloffs in early 2016, shedding nearly 15% of its value. Coming off of solid fiscal year 2016 third quarter results, which it posted on December 18, the Canadian tech company continues its transition from a smartphone maker into a software company. In addition to its already strong focus on security software, which has been augmented by the recent purchases of cyber security firm Encription and security software maker Good Technology, BlackBerry is also preparing to plunge into the self-driving vehicle arena, where its security acumen should prove invaluable. An interesting rumor has surfaced on that front that Apple Inc. (NASDAQ:AAPL) and BlackBerry could be planning a self-driving vehicle collaboration, after the Ottawa Business Journal reported that Apple will open an office in Kanata, Ontario (a suburb of Ottawa) which just happens to be where BlackBerry’s QNX Software Systems, its automotive division, is located.
Although its P/E is rather high at 129, BlackBerry is trading not much higher than its book value, with a price-to-book ratio of just 1.19, thanks to abundant cash reserves of about $2.5 billion, which the company plans to maintain. Given its intriguing push into a high-growth segment and the potential for BlackBerry to be the target of a takeover, the stock appears to be an attractive buy-low option at the moment.
With that in mind, let’s review the latest smart money action surrounding Blackberry Ltd (NASDAQ:BBRY).