Research In Motion Ltd (BBRY)’s Wild Card

Even though BlackBerry doesn’t boast of a market share as that of Apple and Google, its valuation looks cheap when we take into account the BB10’s bright prospect.

BlackBerry has over $2.65 billion in cash and zero debt, which makes it a stable company financially.

Short squeeze in the making

BlackBerry shares have a short open interest of over 30%. As the BB10 device gains market share and the company’s profitability further improves, the stock price will start climbing upwards slowly and the short sellers covering their losses might further boost the rally exponentially.

Research In Motion Ltd (NASDAQ:BBRY) seems undervalued to major analysts as well. Analysts at Morgan Stanley expect a 35% upside from here to $22. Prem Watsa’s Fairfax Financial which holds a significant share in the company intends to to hold long term, believing the fair price to be around $40.

Foolish takeaway

Research In Motion Ltd (NASDAQ:BBRY) seems to be getting back on its feet with key innovations and smart management. The coming quarters are going to be the testing period and if it passes the test, then shareholders will be in for a treat. Its balance sheet is clean with ample cash and zero debt which further stabilizes its foothold. I think this stock deserves a small percentage in your portfolio.

Minu Agarwal has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.