BlackBerry CEO Beats Nasdaq in 1st Year: Chart of the Day

BlackBerry Ltd. investors are buying into John Chen’s turnaround strategy in his first year at the helm -- so much so that the stock is on track to beat the Nasdaq Composite Index this year for the first time since 2009.

The CHART OF THE DAY shows the Canadian smartphone maker’s shares are up 58 percent to $10.25 since Chen took over as chief executive officer a year ago. That compares with an 18 percent gain for the Nasdaq, an index predominantly made up of technology stocks like Apple Inc. and Microsoft Corp. BlackBerry’s 38 percent gain in 2014 alone is on pace to outperform the Nasdaq for the first time in five years.

Chen, who joined BlackBerry after a proposed $4.7 billion buyout collapsed, has outsourced some manufacturing and sold real estate. He’s focused on core business customers by bringing back phones with signature physical keyboards and offering more software-based services. That’s helped put the Waterloo, Ontario-based company on track for break-even cash flow by the end of this fiscal year and for a return to profit the next year.

The turnaround hinges on whether BlackBerry can get big corporate customers to use its new business enterprise server, known as BES12, to manage their devices, said Steven Li, an analyst at Raymond James Financial Inc.

“Ultimately it’s going to come down to whether the company gets back on track,” Li said. “It’s still wait-and-see.”

One of Hollywood’s most recognizable stars -- Kim Kardashian -- came out as a fan of the company last month, saying she loves her BlackBerrys and is on a mission to make sure the phones don’t go extinct.

BlackBerry’s U.S. shares are still a long way off from their peak closing price of $147.55 in June 2008, when its market value topped $83 billion. Chen, who previously led a turnaround at Sybase Inc. and sold it to SAP AG for $5.8 billion, has said BlackBerry’s odds of a successful turnaround are “better than 80/20.”