BlackBerry Ltd (TSX:BB)(NYSE:BB) had a strong Q4 and beat analyst expectations, but the stock has gone on a decline anyway and it is down more than 16% in just the past month.
The sell-off has been so significant that the stock has reached oversold status and as of the end of Wednesday it was sitting at a Relative Strength Index (RSI) of 30. RSI measures the gains and losses that a stock has incurred over the past 14 trading days, and too much selling would send the RSI down. An amount under 30 indicates a stock has been oversold and could be due for a reversal.
However, just because a stock is oversold isn't a guarantee that it will come back up. That being said, market-related conditions have been weighing stocks down lately and with BlackBerry having a strong quarter it's unlikely that this sell-off is related to concerns inve stors have about the company itself.
Another reason the stock might be a good buy is that it is nearing its six-month low and it has had strong support at $13. Snapping up the stock around that price could get you a good entry point on what's otherwise been a good investment.
BlackBerry has done a good job of repositioning itself as a software and services company and it still has many opportunities to grow. Its focus on self-driving software and its reputation for security are strong pillars that the company can build around.
Although it may not be in the handheld market anymore, BlackBerry's current business model will offer investors stability while also creating more opportunities for long-term growth.
