Security Software Gives This Company a Second Life

Before Apple (AAPL) invented the iPod, the company controlled about 10 percent of the PC market at its peak. That didn’t generate huge business. But by reinventing towards having the most user-friendly consumer tech, and some software behind it, the company managed to become a multi-trillion-dollar behemoth.

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  • Other companies are making similar pivots today, finding new lines of businesses with higher profit margins and growth potential.

    One such play? BlackBerry (BB). Known for its phones before the iPhone grabbed the bulk of the market, the company noted that its systems had the best track record for deterring hackers.

    The company has since moved towards becoming a software play in the security space, with an emphasis on mobile technology like smart cars.

    That shift has been a bit slow, but is showing promise, with even some of the most skeptical analysts seeing the opportunity here. Shares are up 102 percent over the past year, but are more than 50 percent off their speculative highs.

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  • Action to take: If the company can continue to grow its software business, it will have a high margin product and should become a much more valuable company in the years ahead. That bodes well for buying shares over making a trade.

    For traders, however, the stock has had a number of spikes higher over the past year on little to no news. The March $11 calls, last going for about $2.15, could deliver triple-digit gains on the next surge higher in shares.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may make a trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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