BB Stock: BlackBerry Limited Comprehensive Stock Analysis

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The US stock market sustained its upward march last Wednesday as investors played down fears that the Republican loss of a Senate seat in Alabama may reduce the chance of passing key legislative proposals, including tax reform.

The S&P 500 rose 0,2 percent to 2 668 in morning trading in New York, led by a 0,6 percent gain for industrial stocks and a 0,5 percent rise for the healthcare sector. The Dow Jones Industrial Average moved 0,6 percent higher to 24 643 and the tech-heavy Nasdaq Composite gained 0,3 percent to 6 879.

Roy Moore lost to democrat Doug Jones in Alabama last Tuesday night, cutting the Republican’s Senate majority to 51 seats to the 49 for the Democrats, as efforts to pass sweeping tax reform proposals enter the final stages. However, investors brushed off the result, arguing instead that it should prove a catalyst to pass tax reform before the year is out and the Mr Jones takes his seat.

“If anything it rushes the tax reform through this year before the seat officially changes hands,” said Peter Tchir, chief macro strategist at Academy Securities.

“It creates more impetus to get things done quickly.”

Tax reform is seen as a boon for stock markets, lowering the statutory tax rate and allowing companies to repatriate overseas cash more cheaply.

The placid stock market reaction to a significant political event is typical of 2017.

After surging during the market ructions during the 2008-09 financial crisis, volatility has remained muted this year and by some measures has dipped to its lowest level on record.

The average difference between the intraday high and low for US stocks hit a new low this year, according to research from Howard Silverblatt, a senior analyst at S&P Dow Jones Indices. The high-low spread sank to 0,1457 percent on November 24 — the lowest for any day since Mr Silverblatt’s records begin in 1962. (Source: The Herald)

Top Pick for Monday: BlackBerry Limited (NYSE: BB)

BlackBerry Limited (NYSE: BB) has grabbed attention from the analysts when it experienced a change of 1.59% in the last trading session to close at $10.84. A total of 5,423,357 shares exchanged hands during the intra-day trade contrast with its average trading volume of 5.68M shares, while its relative volume stands at 0.95. Relative volume is the comparison of current volume to average volume for the same time of day, and it’s displayed as a ratio. If RVOL is less than 1 it is not In Play on this trading day and Investors may decide not to trade it.  If RVOL is above 2 it is In Play and this is more evidence Investors ought to be in the name.  When stocks are *very* In Play one can see a RVOL of 5 and above.  The higher the RVOL the more In Play the stock is.

Day traders strive to make money by exploiting minute price movements in individual assets (usually stocks, though currencies, futures, and options are traded as well), usually leveraging large amounts of capital to do so, therefore they trade on Stocks in Play. In Play Stocks are volatile enough to produce good risk and reward trading opportunities for both bull and bear traders intraday. Most company stocks have very little volatility. They generally move extremely slowly and they only produce big price swings when the company produces good or bad trading results, which may only happen a couple of times a year at best.

In deciding what to focus on – in a stock, say – a typical day trader looks for three things: liquidity, volatility and trading volume. Liquidity allows an investor to enter and exit a stock at a good price (i.e. tight spreads, or the difference between the bid and ask price of a stock, and low slippage, or the difference between the predictable price of a trade and the actual price). If a stock does not have good liquidity then it may take some time before a broker is able to negotiate a deal to buy or sell a stock and the broker may not be able to get the sell or buy price that the trader is looking for. This is a problem for day traders and it could mean the difference between a profitable and non-profitable trade.

Traders have different rules for what constitutes liquidity and a good guide is the volume of trades and volume of shares that are traded each day. 100,000 shares traded per day would be a minimum for most traders and some require 1,000,000.

Trading volume is a gauge of how many times a stock is bought and sold in a given time period (most commonly, within a day of trading, known as the average daily trading volume – ADTV). A high degree of volume indicates a lot of interest in a stock. Often, a boost in the volume of a stock is a harbinger of a price jump, either up or down.

Volatility is simply a measure of the predictable daily price range—the range in which a day trader operates. More volatility means greater profit or loss. After a recent check, BlackBerry Limited (NYSE: BB) stock is found to be 2.10% volatile for the week, while 2.14% volatility is recorded for the month.

Technical’s Snapshot:

The stock has a market cap of $5.70B and the number of outstanding shares has been calculated 525.91M. Based on a recent bid, its distance from 20 days simple moving average is 2.71%, and its distance from 50 days simple moving average is 0.24% while it has a distance of 12.12% from the 200 days simple moving average. The company’s distance from 52-week high price is -7.98% and the current price is 63.01% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 55.57 together with Average True Range (ATR 14) of 0.23.

Stock’s Valuation:

Past 5 years growth of BB observed at -24.80%, and for the next five years the analysts that follow this company is expecting its growth at -9.88%. The stock’s price to sales ratio for trailing twelve months is 5.44 and price to book ratio for the most recent quarter is 2.09, whereas price to cash per share for the most recent quarter are 2.42. Its quick ratio for the most recent quarter is 5.20. Analysts mean recommendation for the stock is 2.90. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.

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