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Maikelmike's  Instablog

Maikelmike
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Graduate of Stockholm University, Masters degree in Finance, Second degree bachelor in Economics, Focusing primary on writing analysts on Telecom companies but may also on occasions provide articles on the stock market as a whole.
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  • Shifting Oil Prices

    How does shifting Oil prices affect inflation?

    This is a question that you may often come across when reading the business newspaper. As there is always at least one article mentioning either - increasing or decreasing oil prices - I think that it may be more than convenient for you to learn the consequences of such price variations.

    Normally when we talk about the consequences of shifting oil prices, we often choose to talk about direct consequences and consequences of more delayed nature.

    One direct consequence of increasing oil prices, is of course the increase in oil related products such as fuel and fuel oil. If the oil prices increases then it will become more expensive to buy fuel and other oil related products. As these are often components included in the calculations of inflation, the increase in oil prices will lead to an increase in inflation.

    The delayed consequences are more difficult to calculate, as they are more dependent on the actions of corporations. Higher fuel costs leads to higher transportation costs which naturally lead to higher prices, as corporations need to compensate for their increase in costs. Higher oil prices also increases the heating costs which also demand actions from Corporations, which often results into higher price levels in the economy.

    How to act on shifting oil prices: An indication of higher oil prices would normally have more positive effects on oil companies, while having the opposite effect on the rest of the companies. As increasing oil prices often lead to higher revenue for oil companies, and higher costs for other companies. However, of course it is also important to differ between companies, as companies in the industry sector may encounter higher costs involved with shifts in oil prices than services based companies, as the former ones are often more exposed towards transportation costs than the latter ones.

    Tags: BP, BLKPF, PRSAF, RDS.A
    Aug 12 3:28 PM | Link | Comment!
  • Londons Leading Estate Agen Chooses Lumia..

    London's leading estate agent, has chosen the Nokia Lumia 820 as its business smartphone and has so far deployed around 900 to its employees.

    These kind of news are very encouraging for Nokia and its Lumia portfolio, which show Nokia is gaining some traction with attracting businesses to use their Lumia line.

    Good!

    Disclosure: I am long NOK.

    Feb 20 5:42 AM | Link | Comment!
  • Why Nokia Will Turn Around

    Okay, after having followed Nokia closely for the last couple of years, I have often encountered situations where I've been forced to share my opinion on Nokia - and why I believe in an eventual turnaround.

    Surely; these encounters have helped me with developing my analysis, and core arguments. Here I will develop or present some of the arguments without really taking a financial approach.

    Let's, skip the results from last quarter where Nokia turned around for the first time after seven straight quarters in red.

    1) Patent Portfolio

    (click to enlarge)

    Yes, The patent portfolio. Lately this has gained more attention from media and analysts; still it's underappreciated by the stock market. How come people price a possible chapter 11 (as they did last summer with the NOK stock) but choose not to price a possible take-over bid?

    The patent portfolio surely provides Nokia with some intrinsic value. It is very hard to put some value on such thing, as it consists of various possible revenue streams. But to summarize it somehow; Nokia has the largest and most essential patent portfolio in the mobile industry. More than 10.000 patent families, and on-going royalties coming from more than 40 companies.

    2)Innovation

    Some people dislike S.Elop. I like him. I believe that the greatest fruit of his work are yet to be shown. We probably will see some at MWC 2013. However, with Elop as a CEO Nokia has developed and regained its position as the most innovative mobile manufacturer. Just look at Nokia Lumia 920 and compare it with its competitors. Lumia 920 is innovative - Iphone 5 e.g. is not.

    Nokia is gaining mind share, it is starting to look youth, new and interesting. Nowadays I see people with the colourful Lumia 920 in their hands when taking the bus or the subway, before I did not do it. Surfing into its facebook page, you see young, beautiful people holding and wearing Nokia phones, accessories. Nokia is looking young and attractive again.

    I do not really remember how thing were a couple of years ago, as I have somehow a bad memory of things. However, I think that this was not the case in 2007, with the introduction with Iphone and Symbian platform starting to decline. Nokia are delivering and transforming into a more effective and innovative player. One thing I like about Elop is that he has changed the mentality at Nokia, and that he really has tried to bring the innovations from that massive r and d spending budget into its products. We have seen that with L920.

    3) Cash position and management

    Although having lost massive market shares and sales, Nokia managed last quarter to increase its cash flow, very positive. My belief is that great management creates great companies and not the other way around. To therefore witness the flexibility of Nokia managements in its most difficult situation to be able to cut outflows, employees and focus its spending in a brilliant way, only strengthens my belief on the Nokia group.

    Surely, there are more arguments, and I will of course share them in another article.

    Disclosure: I am long NOK.

    Feb 15 10:41 AM | Link | Comment!
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