BlackBerry vs Samsung Stock: Which Is a Better Buy?
Canadian phonemaker BlackBerry is on a rebound. After being dismissed as a has-been company and anticipated to die soon, the Waterloo-based tech firm appears not only for a recovery but even growth.
Techcrunch reported that BlackBerry's share price was up 50 per cent on the year and is considered one of the best performers in 2014. From a $7.44 opening price in January, the firm's stock price closed on Tuesday at $11.21.
In contrast, shares of acknowledged market leaders such as Apple grew on 20 per cent for the same period, Google by only five percent and Samsung had even issued a warning to investors to be prepared for a profit decline by up to 27 per cent.
Dr Joseph Louro, chief executive officer of InvestView, urged retail investors considering buying tech stocks such as BlackBerry or Samsung to weigh the pros and cons of each stock before calling their broker or placing orders for shares online.
On Thursday, July 10, Samsung Electronics forecast that its operating profit would likely dip 24.5 per cent for the second quarter to 7.2 trillion won, lower than Thomson Reuter's poll of 8.3 trillion won. In recent sessions, Samsung shares had experienced heavy selling over concerns of competition from cheaper rivals from China.
It was like history repeating itself when Samsung gobbled a huge Apple market share in the smartphone and tablet business by offering lower-priced models compared to the devices made by the Cupertino-based giant which are on the higher end of the spectrum in terms of prices.
BlackBerry CEO John Chen is obviously doing the Toronto company some good as the company changed business strategies and defocused on the mobile and tablet markets and instead shifted to pushing its popular Messenger app as it also released minor updates to its BB10 mobile operating system.
However, despite the brighter outlook, it will still be an uphill climb for BlackBerry as its market share in the smartphone sector continues to shrink to even zero per cent in the U.S. market.
Samsung attributed its expected loss to weak sales, which is part of a bigger slump in demand for products of the South Korean giant across Europe and Asia and the flood of cheaper phones in the market. In June, Samsung's share price went down 11 per cent.
Given Samsung's weak performance, people thinking of investing in stocks of the Seoul-based tech giant should think twice before buying shares.
There is also another reason not to buy Samsung stocks, wrote Pamela Boykoff of CNN Money. It has nothing to do with the stock's performance but the stock location. Samsung is listed only in the Korea Stock Exchange, but it is not listed in any U.S. exchange.
Samsung also does not have an official American Depository Receipt that allows international companies to cross-list its shares and make it easier for non-Koreans to invest in the company.
On the other hand, BlackBerry Limited (Nasdaq: BBRY) may appear to be recovering, with three research companies upgrading the company's stock in 2014.
On Feb 18, FBR Capital upgraded it to Market Perform from Underperform, while Needham also upgraded it to Hold from Underperform on March 31 and Oppenheimer upgraded it to Perform from Underperform on April 28.
Recommendation trends in July likewise hardly changed the past three months with just one Strong Buy, one Buy, 22 Hold, 13 Underperform and 2 Sell.
Given these data, any retail investor who have acquired some investor education would likely not be blinded by BlackBerry's improved share prices and immediately buy its stocks.
Such a cautious approach is one of the benefits of investor education, which InvestView (OTCQB: INVU), a Red Bank, New Jersey-based company, has made it the firm's mission to make available to the public products that will help individual investors find, analyse, track and manage their portfolio. The company does it through its online education, analysis and application platform that provides analysis, tools, education solutions and an application.
It delivers subscription-based financial education courses delivered through InvestView's web site. InvestView also allows new retail investors to use the portal's subscribed information on a 2-week trial period for $9.95.
InvestView's web-based tools were designed to simplify stock research and improve the investor's research efficiency. One such tool is the Market Point, which is made up of five sections, namely: Charts, Stock Watch, Market, Calendar and Campus.