Includes shares in BlackBerry Ltd., Nintendo Ltd., Facebook Inc. and Starbucks Corp.
Mr. Russell is a member of an investment club at a university. He is on the club's stock-picking committee, which recently won second place in a stock-pitch contest sponsored by seekingalpha.com.
How he invests
Mr. Russell monitors a list of companies that he knows and understands well. If growth catalysts emerge for any of them, he'll dig into their financial statements. Those without heavy debt loads and other red flags are candidates for investing.
He's quite bullish on BlackBerry. Although the stock market continues to value the company as a declining smartphone manufacturer, Mr. Russell sees evidence that it is transitioning successfully to software and services, a sector with higher margins and faster growth.
In fact, the contribution of BlackBerry's software and services division to total revenues has climbed over the past two years and now stands at 65 per cent. It should go even higher given management projects the division's revenues will keep on rising at a 30-per-cent pace in 2017.
With this ongoing growth, Mr. Russell believes earnings surprises are more likely in the quarters ahead. Indeed, fourth-quarter results released in late March (all figures in U.S. dollars) showed BlackBerry's operating earnings beat consensus estimates with a jump to 4 cents a share.
One of the bright spots in the software portfolio is the QNX operating system, he says. It is the recognized leader in software for automotive electronics – BlackBerry's infotainment, safety and autonomous-driving applications are now installed in more than 60 million vehicles globally.
QNX is also preferred by companies that make products where safety and reliability are paramount. Included are suppliers of medical devices, train-control systems, industrial robots, hardware modules and other mission-critical applications.
BlackBerry has about $1-billion in cash reserves, net of debt. Mr. Russell adds that the company was recently awarded $815-million in an arbitration settlement with Qualcomm Inc. These financial resources will help fund the company's turnaround for some time yet.
Over the five weeks to May 2, BlackBerry's stock shot up by more than 35 per cent.
He bought shares in an insurance company after it had a big run-up in price following a merger announcement. Over the following month, much of the run-up was unwound.
Invest for the long term, but don't ignore short-term fluctuations, Mr. Russell recommends. Specifically, use the dips to build positions and be wary of buying after a big increase.
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