Some of the posts on the Nokia (NOK) message board are becoming breathless. I'm sure that early on the morning of the 24th, there will be many Nokia bulls and bears peering expectantly at their computer screens for the news out of Helsinki. I only have a comment for the bulls, because I am one. The comment? Chill out.
The underlying value of Nokia is there to see. Many of you bulls are astute enough to realize that. The profitability of the joint venture with Siemens (SI), the patent portfolio, the nascent but undeniable rebirth of the device division, and the cost-cutting efforts that are already bearing fruit. Also, there's the dividend with a succulent yield that pays us handsomely to wait.
If the earnings announcement is a non-event and the stock goes nowhere, it's no big deal. All that tells us is that the good news is already baked into the share price.
If the news is much better than expected and the share price idles or even falls, it's a great buying opportunity. It's a chance to buy a little more of a great company that's on the mend. We don't buy stocks, we buy companies.
I don't make predictions. I have no idea what Nokia will do Thursday. I will say this, however; I have never seen such thinly veiled disdain for a stock as what's exhibited daily for Nokia on many of the financial channels. I'm sure some of these folks have motives for the things they say, but it would be refreshing to hear a little of the other side of the story. The other day, one of the Nokia bears stated he was buying puts on Nokia because of speculation that Nokia might reduce or eliminate its dividend. Another sitting nearby confessed ignorance of the fact that Nokia paid a dividend.
Frankly, I believe a complete elimination of the dividend would be best for now. It would free up about a billion a year in cash. I realize that I mentioned the dividend's succulent yield earlier, but I'll forgo a 5% yield if the cash can be put to better use growing the company. We bulls invested in what we think is not only a turnaround story, but also a story of growth.
The commentator's ignorance of Nokia's dividend told me something I already suspected. The majority of these financial shows aren't worth watching. A good investor does his homework and ignores the silly noise.
But come Thursday morning, I'll be watching too. I admit it. But whatever the news, and whatever the reaction, remember why you bought your piece of Nokia. I know I will.