Nokia: Terrible Bets Come Back To Haunt Them [View article]
Yes, the announcement was unexpected. How can Nokia announce a second restructuring just two months after the first restructuring? It's crazy. Normally companies try to get all the bad news out in one quarter so as not to keep disappointing investors with a string of bad news. This is very perplexing.
The only logical explanation I can think of is Nokia is paving the way to be acquired by MSFT. The 2nd restructuring is done to meet the last minute, final condition for the sale.
If MSFT decides to turn down this once in a generation opportunity, then Nokia should just sell itself. Sell its patent portfolio to a MSFT competitor and forever lock MSFT out of the mobile market. The NSN unit can go to Ericsson; the Navteq unit can go to Apple for mapping; and the cell phone unit can go to a Chinese company like ZTE.
Combined it surely would fetch more than $2.35 a share!
Nokia: It Is Time To Buy This Severely Undervalued Stock [View article]
Microsoft has three scary weapons to deploy in this war of ecosystems: Xbox, Office, and Windows. It will become apparent once Win8 launches how quickly the tide will turn in their favor.
One example of compelling value is a Nokia Win8 tablet preloaded with Office, Smartglass, Nokia Drive, Skype, Pureview technology, along with some hit XBox games-- at a price lower than the iPad's.
The dividend was on restricted stock units that have not vested yet. Does it make sense to earn a dividend on shares that one does not own? Sounds like another example of executive plunder of shareholder wealth. This issue goes beyond Apple and infests corporate America.
How Microsoft Can Put Nokia's Recovery In High Gear [View article]
We as small time investors cannot will a stock to go higher. The Finns need to show some pride and MS needs to deliver on Win8 to stem the tide of history. The fog of war dims our vision and no one can see ahead very clearly. We will know by the middle of next year whether the Nokia-MS alliance is a success or a failure. So far the Lumia series looks impressive.
On the opposing fronts, Apple under Tim Cook has yet to deliver anything revolutionary. The products coming to market are from the Jobs pipeline which will run dry at some point (or has it already run dry?) We know Tim Cook is no Steve Jobs, because if he was, he would've started his own hundred billion dollar enterprise instead of working for a salary.
As for the Android camp, it won't be long before Google stabs Samsung in the back. Google's purchase of Motorola Mobility shows it aims to move in the direction of Apple where it controls both the software and hardware sides. Samsung and other Android vendors will be dropped at the dumpster to dig for scraps.
Turn The Key On This Retirement Strategy [View article]
Times are always tough. We will each have to find our own way, and help others as best we can. Early retirement is within reach for the vast majority of people. They may have to make sacrifices, such as living in a 1 bed 1 bath house, riding bicycles to the grocery store, drinking tea when sick, reading books instead of watching cable TV. It is all very doable, and a lot more fun than whining.
The Market Is Missing Nokia's Enormous Potential [View article]
Microsoft may open their stores inside Barnes & Noble. Get a cup of coffee, read a physical book or ebook, buy an X-box, Lumia, or Nook for a very reasonable price. Meet smart & interesting people. It would be much more enjoyable than trying to squeeze into an AAPL store, having to stand the whole time, and paying crazy prices for the same gadgets.
The Battle For Third Place: BlackBerry BB10 Vs. Microsoft Windows 8 [View article]
RIM will have to swim against the tide of public opinion, not an easy task. But we live in the age of social media; if a something sexy from RIM comes out, word will spread like wildfire. So far RIM is holding their cards close to their vest with BB10. The market is guessing the cards contain nothing special. People are selling now and asking questions later. If RIM has something that goes beyond BB10, they are not telling either. We shall see. I am definitely keeping an eye out for RIM; at these price levels the stock is very compelling.
The Market Is Missing Nokia's Enormous Potential [View article]
If you compare the Q1 numbers of the Nokia Devices & Services division (cell phones), you will see that they eerily mirror the Motorola Mobility quarterly numbers.
Motorola has $3B in net cash; quarterly revenue of $3.1B; profit margin of 24.5%; SGA of 14.0%; R&D of 11.9%.
Nokia has $6.3B dollars of net cash for the whole company. The Devices division comprises 57.7% of revenue, so their claim to the net cash is $3.6B dollars. Quarterly revenue of $5.5B dollars; gross margin 24.4% of revenue; SG&A 13.8%; R&D 12.6%; and restructuring 3% which Motorola does not have.
Google paid $12.5B for Motorola, or $9.5B net of cash, or 73% of yearly revenue. Let's assume a very negative scenario where Nokia's cell phone revenue plunges by 25%, they'd still have an annual revenue of $16.5B dollars by the end of 2012. The same valuation of 73% of net sales would give Nokia's Devices & Services division a price of $12B, plus $3.6B in net cash, to equal $15.6B.
This calculation leaves out Nokia's other two other divisions: Location and Services and Nokia Siemens Network. Even if Nokia dumps those at fire sale prices tomorrow, they should be able to fetch at least $4B dollars, plus their portion of the net cash of $2.5B (from the $6.3B dollars). The total would be $6.5B dollars in value.
Nokia's total intrinsic value is at least $22.1B ($15.6B + $6.5B). Yet the market is only ascribing a measly $10.7B dollars of value to Nokia. Talk about an irrational undervaluation!
On the other hand, the same market is ascribing a $100B valuation to Facebook, whose future depends on the health of one 28-yr old Mark Zuckerberg.
Nokia Lumia Is No Apple iPhone Killer [View article]
I doubt it's due to Galaxy S3. That particular phone doesn't have the power to move markets. More likely it is due to momentum technical trading. No one is putting a floor on the stock so short sellers will keep pounding it.
This is a "bet the farm" stock. You will either get rich or go broke.
Strategic Investing In Equity And Debt: Target 2042 [View article]
Thanks for sharing a long term strategy. I am trying to train myself to look far into the future. It's too easy to get caught up in short term price movements and forget about the big picture. I have had to separate my long term holdings into a separate brokerage account from my short term holdings. If I check on a stock a lot, I instinctively want to trade it, even if the original goal was to hold it for a long time.
Nokia's Not Connecting: Fitch Follows Moody's With Downgrade [View article]
The Lumia 900 is doing very well. ATT cannot keep them in stock. There is no production problem (that we know of) that would cause a supply shortage. Customers are simply snapping them up. In this age of social media, it won't take long for the proverbial word of mouth to get out. What began as a snow drop, will transform into an unstoppable avalanche. Even if we're rolling down Mr. Everest, it will take some time for the avalanche to gather speed and size.
The next couple of quarters will be bad. Lumia market share gains won't be enough to offset legacy losses. Nokia must transition to Windows Phone quickly and roll them out to all the major carriers worldwide. Nokia must continue pushing down the prices. Put the product in front of the customer, and Let them decide whether the Iphone or Galaxy is worth $200 more (unlocked). Many will make the smart, frugal decision and go with Nokia -- a brand known for call quality, good build and value.
For me as a Nokia investor, I will be watching closely to see how fast the company can release Window Phone models, and to how many different carriers. Time is of the essence. They have one final window of opportunity before customers tune them out for good. Get to work, Nokia!!!
Nokia Lumia 925: Disappointed? - Not Really [View article]
Nokia is ahead in camera technology. They will be dominant in this space when the 41MP Pureview WP8 phone comes out later this year or early next year. Anyone who wants to take great pictures, will want to buy a Lumia. This is a formidable differentiator for Nokia. The run of the mill specs like 16GB vs 32GB, will not sway the needle much.
The 'Retire Young' Portfolio: Let's Introduce This Oil Company [View article]
The problem with investing in Europe, especially northern Europe, is their socialist model of government and society. It means high wages, high benefits, rigid labor rules, strict environmental regulations, powerful and unreasonable unions. Add in the sad fact that these societies have low birth rates, so their populations are shrinking. You never know when these guys decide to call a strike and shut down production so they can go on an early holiday.
Also, Statoil historically relies on fields near its home country. As those fields dry up, they have to go outside of their comfort zone to find oil. With Norway being a small country with a weak military, it is quite a task for it to protect its oil fields in hostile foreign lands. To mitigate such risk, they can invest in developed countries, such as Bakken in the US, which may not be cheap.
From a valuation perspective, STO at $23 seems attractive for a possible total return of 10-12% percent in a year. Long term, I would prefer US based oil companies when the price is right.
The 'Retire Young' Portfolio: Let's Introduce This Oil Company [View article]
Once a year dividend is so out of touch with the real world. Retirees who might want to live on dividends do not like it. Young investors who might want to spend the dividend on instant gratification items do not like the long wait. Buying just before the ex-dividend date and then selling it shortly after, is a little risky. STO definitely needs to get on a quarterly calendar.
Nokia: Terrible Bets Come Back To Haunt Them [View article]
The only logical explanation I can think of is Nokia is paving the way to be acquired by MSFT. The 2nd restructuring is done to meet the last minute, final condition for the sale.
If MSFT decides to turn down this once in a generation opportunity, then Nokia should just sell itself. Sell its patent portfolio to a MSFT competitor and forever lock MSFT out of the mobile market. The NSN unit can go to Ericsson; the Navteq unit can go to Apple for mapping; and the cell phone unit can go to a Chinese company like ZTE.
Combined it surely would fetch more than $2.35 a share!
Nokia: It Is Time To Buy This Severely Undervalued Stock [View article]
One example of compelling value is a Nokia Win8 tablet preloaded with Office, Smartglass, Nokia Drive, Skype, Pureview technology, along with some hit XBox games-- at a price lower than the iPad's.
Why Nokia Could Triple By 2015 [View article]
How Microsoft Can Put Nokia's Recovery In High Gear [View article]
On the opposing fronts, Apple under Tim Cook has yet to deliver anything revolutionary. The products coming to market are from the Jobs pipeline which will run dry at some point (or has it already run dry?) We know Tim Cook is no Steve Jobs, because if he was, he would've started his own hundred billion dollar enterprise instead of working for a salary.
As for the Android camp, it won't be long before Google stabs Samsung in the back. Google's purchase of Motorola Mobility shows it aims to move in the direction of Apple where it controls both the software and hardware sides. Samsung and other Android vendors will be dropped at the dumpster to dig for scraps.
Turn The Key On This Retirement Strategy [View article]
The Market Is Missing Nokia's Enormous Potential [View article]
The Battle For Third Place: BlackBerry BB10 Vs. Microsoft Windows 8 [View article]
The Market Is Missing Nokia's Enormous Potential [View article]
Motorola has $3B in net cash; quarterly revenue of $3.1B; profit margin of 24.5%; SGA of 14.0%; R&D of 11.9%.
Nokia has $6.3B dollars of net cash for the whole company. The Devices division comprises 57.7% of revenue, so their claim to the net cash is $3.6B dollars. Quarterly revenue of $5.5B dollars; gross margin 24.4% of revenue; SG&A 13.8%; R&D 12.6%; and restructuring 3% which Motorola does not have.
Google paid $12.5B for Motorola, or $9.5B net of cash, or 73% of yearly revenue. Let's assume a very negative scenario where Nokia's cell phone revenue plunges by 25%, they'd still have an annual revenue of $16.5B dollars by the end of 2012. The same valuation of 73% of net sales would give Nokia's Devices & Services division a price of $12B, plus $3.6B in net cash, to equal $15.6B.
This calculation leaves out Nokia's other two other divisions: Location and Services and Nokia Siemens Network. Even if Nokia dumps those at fire sale prices tomorrow, they should be able to fetch at least $4B dollars, plus their portion of the net cash of $2.5B (from the $6.3B dollars). The total would be $6.5B dollars in value.
Nokia's total intrinsic value is at least $22.1B ($15.6B + $6.5B). Yet the market is only ascribing a measly $10.7B dollars of value to Nokia. Talk about an irrational undervaluation!
On the other hand, the same market is ascribing a $100B valuation to Facebook, whose future depends on the health of one 28-yr old Mark Zuckerberg.
Nokia Lumia Is No Apple iPhone Killer [View article]
This is a "bet the farm" stock. You will either get rich or go broke.
Strategic Investing In Equity And Debt: Target 2042 [View article]
Tiffany & Co.: Dividend Diamond In The Rough [View article]
Nokia's Not Connecting: Fitch Follows Moody's With Downgrade [View article]
The next couple of quarters will be bad. Lumia market share gains won't be enough to offset legacy losses. Nokia must transition to Windows Phone quickly and roll them out to all the major carriers worldwide. Nokia must continue pushing down the prices. Put the product in front of the customer, and Let them decide whether the Iphone or Galaxy is worth $200 more (unlocked). Many will make the smart, frugal decision and go with Nokia -- a brand known for call quality, good build and value.
For me as a Nokia investor, I will be watching closely to see how fast the company can release Window Phone models, and to how many different carriers. Time is of the essence. They have one final window of opportunity before customers tune them out for good. Get to work, Nokia!!!
Nokia Lumia 925: Disappointed? - Not Really [View article]
The run of the mill specs like 16GB vs 32GB, will not sway the needle much.
The 'Retire Young' Portfolio: Let's Introduce This Oil Company [View article]
Also, Statoil historically relies on fields near its home country. As those fields dry up, they have to go outside of their comfort zone to find oil. With Norway being a small country with a weak military, it is quite a task for it to protect its oil fields in hostile foreign lands. To mitigate such risk, they can invest in developed countries, such as Bakken in the US, which may not be cheap.
From a valuation perspective, STO at $23 seems attractive for a possible total return of 10-12% percent in a year. Long term, I would prefer US based oil companies when the price is right.
The 'Retire Young' Portfolio: Let's Introduce This Oil Company [View article]