Tasos Galanopoulos

Tasos Galanopoulos
Contributor since: 2013
Brazil coming to their ATM.
This is a factual article. No negative or positive sentiment is expressed, just the real fact of an accounting change.
Thanks, an interesting read. I may also consider a position in GG.
I would recommend looking into McEwen which has no debt and features quite a few ex-GoldCorp execs including their CEO Rob McEwen who was the founder and former Chairman and CEO of GoldCorp. They have a strong management team in place with a proven track record. This is certainly one of the companies to consider.
What I don't particularly like about ABX is their comparatively high leverage with a debt/equity ratio > 1 (albeit with depressed stock valuation).
Another company worth considering Compania de Minas Buenaventura - BVN. Still a buy after their recent pop from a great basing pattern. Recently upgraded to outperform by JPM with a $19 price target and again no debt on their balance sheet, this company has overshot to the downside driven by extreme negative sentiment.
I am long both BVN, MUX.
That's why a debt free miner like McEwen Mining Inc.(MUX) can rally on a day that Gold is getting clobbered. Invest in debt free miners that are profitable, and your chances of success rise significantly. Fitch opinions about credit worthiness has little impact on existing liabilities for such companies. I have recently established long position in MUX.
Or not tapering but talking about tapering as that's all it takes to make the yields rise and the market to drop. Will be interesting to see what effect a follow through will have.
My take is that they will talk a lot about taper, then eventually they will taper, then decide to untaper even more than the taper.... It's a mess and the Fed decisiveness doesn't seem to be there, or in fact their calculations of the effect of any taper (or just talking about taper) has on the market.
TH can't face any questions... He just wants his golden bonus while leaving everyone holding the bag.
"There will be no self-guiding vehicles that do not require special roadway concessions for a long time"
Assumptions, check out the video below, no special roadway concessions.
"A partial solution is no solution and a waste of money"
Completely disagree. No-one gets a home-run on their first release. The technology will mature, for the ones that are involved in it for the ones that aren't it will be catch-up or licensing
It's easy to dismiss the Mercedes effort with Nokia, but companies are making strides in this area. This effort is impressive to say the least. It's not only Tesla that can claim to be a 'Technology company' I'm afraid.
The viability of this product category has been proven and the rest of the car manufacturers GM, VW group, Ford, Toyota are not going to leave all the pie to Tesla. Will be interesting to see how this unfolds from the sidelines.
I doubt that with an extra 32000 employees on the Microsoft payroll, Microsoft will dabble in this space. I expect this to be a serious push from Microsoft although that doesn't mean it will ultimately succeed. MS hardly has a proven track record in the hardware space (In fact it's track record is one of write-offs). It's tempting to say 'This time it's different', since arguably the Nokia devices bring Hardware innovation to the table. Now it's MS turn to do their part for the lagging OS features and put some serious money into Marketing (preferably without Steve Ballmer's direction) - The market is already discounting this in Microsoft and any sign of success will be a boost for MS - Given how entrenched MS is in the enterprise and complete unsuitability of Android for that segment, MS has a golden opportunity to capitalise on its investment.
Time to load up, low debt, severely punished in the negative sentiment, now with a change of sentiment this is a reversal in the making which can easily run to 20.
Seppo, thanks for your 2 great articles and your constant updates in the stocktalk section.
I find it perplexing that the analysts suddenly discovered the other parts of Nokia. To suddenly have the Nokia target raised from $2 to $7.7 must mean that this D&S division must have been quite a deadweight valued at -$5.7 per share - Funny how it fetched a few billions when sold. I find it difficult to follow their reasoning. Sum of the part valuations here on SA by redrut and others where much more spot on.
The higher this flies, I find it increasingly difficult that the shareholders will reject the deal with all this value suddenly unlocked. However, Abu's great article with questions along with those in comments do need answering.
My last stock talk for those of you that follow that side of SA was me pulling the trigger early on a partial position (!), hedging against Kerry wanting to start World war III. At least the rest is still in there, too bad I didn't have access to puts.
Long Nok and waiting for a dip to add more (aren't we all :-) - We could well be 1$ higher before we see that breather.
Excellent questions that need answering.
This statement takes it home:
"The board apparently complained of Nokia's weak market share in January 2013... The position of Nokia then and now is fundamentally different. Yet it appears to have been sold on where it was 9 months ago."
Agreed, it does seem that D&S was sold at Jan 2013 price.
I share your sentiment. Subscriber base would basically be guided out by means of: This is your new (not so) compatible product, your current one is reaching end of life by X, windows live messenger style.
An interesting take, however, I don't see why Microsoft would need 3 mobile operating systems:
- Windows Phone
- Asha
It also does not need yet another app store.
It could do with all the patents and merge the best of all features into Windows Phone.
If Microsoft was to go after BBRY it would only be after a very particular slice that it needs the most. TH has mentioned that they're prepared to slice up BBRY to sell what's relevant to interested parties.
What would presumably be of most interest:
- Patents
- Subscriber Base
- BES that fits well with its enterprise offerings.
It would arguably crown Microsoft as the de-facto go to serious smartphone company relegating Android to play phones with their aptly named play store. The only other contender for smartphone in the enterprise is Apple.
Re hardware and QNX, MSFT now has hardware, factories and two mobile Operating Systems. QNX and BBRY devices would be too much noise on Microsofts existing efforts with the Lumia line.
Spot on Doggie
I was and remain a Nokia shareholder, but I wasn't looking for a short pop, but long term growth.
This is a great deal for Microsoft, a bad deal for Nokia.
Completely agree with consumer confidence destruction.
On a similar note, people want to own an aspirational brand, not a 'has been', with this announcement Nokia's devices have been pushed into the 'has been' category. Not the marketing tone one wants to be setting foot in the Christmas quarter.
Too cheap too soon. Completely agree with your title.
With all the eyes focused on Lumia hardware, it is easy to overlook the value destruction that's about to occur on the Services side of Devices and Services.
Microsoft just acquired services attached to the Lumias that for which it has little use for other than squeezing the user base out of them.
Let's face it, does Microsoft really need yet another app store:
Does Microsoft need 2 music services:
1. Nokia Music: http://bit.ly/15yubVi
2. XBox Music: http://bit.ly/15yubVj
How about another OS in the form of Asha... doubtful.
What is Microsoft's commitment going to be to Asha? Most likely committed to converting the hardware to support Windows Phone.
So, Microsoft is just going to keep an extra 32000 employes as an act of good will? Unlikely.
Already this deal casts a cloud over 2 services and a complete operating system - synergistic value destruction.
The timing of such a reshuffling just as the teams are gearing up ready for the holiday quarter in which execution focus and clarity is needed, will most likely negatively impact performance in the cut-throat competitive smartphone landscape in the quarter that makes a big difference
Thanks Genesis, a great read.
I haven't followed Ferragu's overall track record, but over the past year, his record on Nok does not look good.
In fact, if anything his attitude just seems inappropriate to me. Instead of recognizing and giving credit where due, he doubles down with bombastic fear-mongering claims and language 'Disastrous Q3 ahead', '1.5Eur price target' we only have a couple of months to see if he is just being a muppet or if he is indeed on to something. My money is on that he is the former with respect to Nok.
I remain Long Nok, my concern is not so much in Ferragu's claims but in the overall market direction. But then again the market does have a tendency to rise on a wall of worry as in Dec 12. The difference this time though is that SPX and INDU have violated key support lines so prudence is warranted for the risk averse.
@Mathias, Thanks for your reply - I've made my case for Nokia's growth in my recent (and only) SA article aptly named, Nokia: a turnaround with solid growth prospects http://bit.ly/13LCmFR
But let's go through the upcoming 4 quarters and see whats in store:
q3/q4 should be strong quarters - a whole range of new devices (925/625/1020) to make their full impact on the market and Lumia 520 gaining traction. q4, the Christmas quarter is historically a strong quarter for the whole industry. At the same time, Nokia is still scheduling new devices to keep the buzz going.
In 1q14 we have Windows and WP 8.1 addressing many of the users (and corporations) usability concerns. Next there is corporate adoption that I expect to start kicking into higher gear in 2014 and their choice will be between WP and iPhone, there is little room for the droids in the workplace mostly down to a tarnished security image. Add the 600 Microsoft point of presence in BBY for the retail push. Things are moving. http://bit.ly/14qD96u
Nokia is the market leading manufacturer of WP devices and I expect them to grow together with Microsoft overall claiming some market share from the leading ecosystems which will result in above industry growth.
If anything the 25% assumption isn't all that aggressive, in Q2 they manged to achieve 32% qoq growth. The 'game plan' is there, it boils down to execution.
My eyes are seeing a picture of growth that will unravel in the upcoming quarters in Nokia's favor.
A great article running through some interesting numbers. Thanks for sharing these insights.
I have to disagree with one remark though "This (selling more than 44m phones over next year) seems quite unlikely to occur as Nokia only sold 26.5M smartphones over the last twelve months."
I think comparing with past 12 months is not a good practice, one needs to see sales growth trajectory and keep it constant or reduce it.
To achieve 44million Lumias over the next 4 quarters nokia only needs 17% qoq growth, which is a very achievable target given the sales volume trajectory of Lumias. In such a hypothetical scenario, sales volume would only need to reach the following numbers:
3Q13 8.66M
4Q13 10.13M
1Q14 11.85M
2Q14 13.87M
This results in 44.5M - Although, not necessary to happen in that order, it does seem a very realistic and achievable scenario.
If Nokia manages to sustain higher double digit increase which is also likely, it can afford a small drop due to seasonality in 1Q14 and still hit the target. But with WP 8.1 coming out in 1Q14, I doubt the seasonal dip will be pronounced.
In any case, a more likely scenario is an average 25% qoq growth which would result in 53 million Lumias over next 4 quarters. However, I also expect the operating expenses to tick up. If Nokia can keep these down while ramping up, will make the difference between being in the black or not for D&S over the coming 4 quarters.
Thanks again for an excellent analysis, it allows people like myself to plug in a different set of assumptions and reach different conclusions - Very helpful indeed!
Another great article Redrut, deriving valuable insights by running through the numbers. Especially your insight as to how much D&S, considering its Lumia and Asha making all the noise for Nokia, adds to Nokia at the moment. Should D&S become profitable with a sustained upside trajectory in Lumia sales, we should see its contribution to Nokia's market cap increase and hence catalyze further growth. But even discounting D&S, it's interesting to see that Nokia is still trading at a discount.
I agree with your conclusion and intermediate price target. My estimate would be that we see $5.20 slightly sooner, around next Q release, but in any case, the direction is mostly up.
Looking forward to seeing the statcounter OS usage climb to %5 - %6 by 3Q14 translating to 30 - 35 million quarterly Lumia sales. That will be big and Nokia will get there, my conviction lies in my long Nok position.
(A minor thing, I suspect that you meant to refer to nokianetworks.com as the nicked domain. ;)
Great article - Thanks
Nice one Andreas - Easy to visualize in one go, thanks for this. Mixed results overall, but with a positive skew is what I read on it.
China, up at an increasing rate (++)
AU, EU5, overall up at a steady rate (+)
US, took a dislike on WP (-)
Well done for adding a fresh perspective to the conversation.
I agree - Sony Mobile, and also LG with their record smartphone sales of last Q are both making a comeback on the Android platform.

The statement 'Only 1 manufacturer profits on Android' has turned into a fallacy. Sony will probably post solid smartphone results on Thursday.
In the latest Kantar WP report (which is a big mix of results for WP) one piece of data that caught my attention was the tremendous shift in Spain towards Android at over 90% leaving no room for a 3rd ecosystem. This shift is driven by none other than Sony and LG having 19% and 17% in that market as Kantar reports: http://bit.ly/1chfKow
It remains to be seen if the Lumia 520 can help spur a rebound in those markets, we do need to see a greater sense of urgency from the MS camp with their upgrade schedule.
Nokia has a big bargaining chip, as they could single-handedly bring an end of the Microsoft's Mobile efforts as in MS needs Nokia more than Nokia needs MS. Nokia is aware of this and its no wonder that the VP has started firing warning shots by saying MS should speed things up. http://dthin.gs/1chfMwF
Nokia is delivering on their end of the deal. While Microsoft is making progress they need to deliver on their end too at a brisker pace, otherwise they risk being left with an unused mobile platform should Nokia choose an alternative path. Of course, while Lumia sales are pointing up at an increasing rate then there is no overall 'problem' - But if Microsofts past with the XBox pricing is of any indication, they will do - anything - to gain market share even if this means subsidising sales of low end lumia devices such as the 520. (A 4G LTE device at $90)
I remain bullish on Nokia but we need to be aware that Nokia's fate is increasingly lying in the hands of Microsoft (for D&S). The only way it would come back to Nokia would be if it chose to release an Android flavour of a high-end device (how's that for product portfolio confusion?! :) - In any case, I don't see that happening any time soon even though I agree with what others have mentioned in comments (Andreas) that Nokia is most likely tinkering with Android internally as a separate plan, or even they may release increasingly highend Asha devices.
While the competition is strong, I think Nokia is doing the right things in the capacity that it can. It is Microsoft that has the power to push the ecosystem to the next level. I believe they will make slow and steady progress quarter on quarter until critical mass is attained next year (fall).
Thanks for this article, a very interesting read and summary of the patent wars between the leading device manufacturers.
However, I have to disagree with the final takeaway that settlement would keep less successful competitors at bay as they have options depending on what Apple does.
A couple of points worth mentioning - 4 out of 7 patents concerned are software patents. As a result, Apple is also fighting Google, using Samsung (the leading Android platform hardware manufacturer) as its proxy.
It is well known that Microsoft and Apple have a cross licensing agreement in place since 1997 http://bit.ly/12nPGpK so Apple won't be chasing software patent royalties from manufacturers that choose WP.
If Apple decides to start litigating against other Android manufacturers, it has the potential to result in even higher royalties per Android device (reports already quote that the MS only portion of Android royalties can reach $8 per device), potentially forcing manufacturers to re-evaluate the cost of doing business with the 'free' Android.
Ironically, Microsoft could actually be the beneficiary if Apple directed its software litigation actions towards Android manufacturers with a weaker patent portfolio. It makes Windows Phone more competitive (it would of course also help if MS made it more affordable in addition to a rising license fee for Android) and also MS can provide a 'litigation shelter' when it comes to the software patents at least.
Another point is that there are other manufacturers that also have a formidable patent portfolio to whom Apple itself is a licensee and is paying royalties after losing court cases (Nokia comes to mind)
I do agree with your point that Investors should pay attention to the ongoing patent wars, but the dynamics are far more complicated than just Apple-Samsung - There are a couple of great infographics here http://bit.ly/12nPF5k that illustrate the point
Herve, Thanks for a concise summary of points that will put upwards pressure to Nokia's market cap. I completely agree with your conclusion "Nokia is a STRONG BUY. The share price does not reflect the change in status from survivor to credible challenger."
Thanks Charles for your support! I think too that there is value in HERE, it seems that its just a much more long term road before it becomes profitable. They are making corporate inroads and have so many success stories but are still not making money out of it. The speculation goes along the lines that all retailers will eventually be listed on such platforms, with proximity based deals and promotions. They will get there eventually, but its still at least 2 to 3 years away I feel. Your guess does seem reasonable, a 1028 for Verizon
Amazing price drop in a short space of time.
One has to wonder what will be the price of 521 by Christmas then. This will be the aggressively priced volume leader. It ties in well with Jacob Steinbergs recent article on commoditization of smartphones:
http://seekingalpha.co... - a great read
Thanks gwynfryn,
For your reference these are the embedded videos that were included in the article:
Peter Skillman on The Nokia Asha 501
Pelican Imaging Smart Array Camera
Reliability Testing that sets Nokia phones apart
Precision engineering in the Lumia 925
Thanks OW, you have been a tireless contributor on this forum with your commentary. I do feel that SA is a great place for this article as it was inspired by its great community - Thought provoking articles by the Nokia frequents Abu, Redrut, Charles Santerre, Andreas Hopf, Genesis and Jacob Steinberg et al. So many insightful links posted in the stocktalks by people like Mr KIA, colorado, Leont and so many others from who I've derived ideas and have helped me shape my opinion on Nokia. Therefore SA seemed like a fitting place that has after all brought us together to debate about Nokia today :) - I'll also be following the collective wisdom of both bulls and critics and if I have another light bulb moment rest assured, I will share.
Thaks dwdallam ,
Bonus video: What exclusivity with Carl Zeiss optics means
There was a limit to how many videos one can add :)
Thanks Abu,
Insight has done some research on how security can impact BYOD adoption: http://bit.ly/16MGZ4j
While this doesn't give us a direct view on sales, it does give us a 'view by proxy' if you will. It is likely that a corporation faces similar security concerns if they are researching to buy their very own device.
What's interesting maybe to note in that report is the following numbers:
- Currently 26 per cent of IT departments support just iOS and Windows mobile device operating systems
- Going forward, IT departments intend to support these further, with Apple devices (38 per cent) and Windows (29 per cent) featuring the most in IT department plans
- Android and BlackBerry devices are almost comparable in terms of how support is planned moving forwards, with Android (17 per cent) just one percent ahead of BlackBerry (16 per cent)
We're given some very interesting numbers. The leading OS, Android, is already lacking in preference in adoption in the Enterprise coming in 3rd with 17% of IT organizations planning support for it a far cry from the market share it currently enjoys in the consumer market.
In second place 29% of IT organizations plan to support Windows Phone. This is a big deal. 29% is a large multiple of the current windows phone market share of around 5% depending on which report one reads, so a six-fold growth potential in organisations. I do believe that corporations will be the Trojan Horse that will give Windows Phone its much needed critical mass in 2014.
I'm not so sure if retail consumers will be security conscious enough to switch from Android, but we have signs in the report that the enterprise is security conscious enough to do so. Once you have the IT departments telling their employees why they can't have android, then this could have some spill over effect into the consumer market.
Just to complete, the iPhone numbers quoted are equivalent to the market share it currently enjoys, so while it is quoted as the leader it is merely retaining it's existing market share.