Seeking Alpha

Maikelmike's  Instablog

Maikelmike
Send Message
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.
View Maikelmike's Instablogs on:
  • Nokia HERE Deals With Toyota

    Nokia continues to improve their location & commerce division. This results normally into new deals and partnerships. Today the Finnish manufacturer announced a deal with Toyota Motor Europe.

    The new deal means that HERE Location platform will power next generation of navigation and infotainment systems in upcoming Toyota Cars.

    As it was reported last year, the navigation in 4/5 cars is already powered by HERE which includes car manufacturers like BMW, Mercedes, Volkswagen, Hyundai and now Toyota.

    The Location and Commerce division of Nokia is still very small however as we moves forward it will grow. Last year Nokia announced e.g. the rebranding of its mapping services into HERE and bought Earthmine, a 3D street-level imaging specialist, reaffirming its concentration towards mapping and location solutions.

    Press Release:
    HERE Platform from Nokia Powers Toyota Motor Europe's Next Generation of Navigation and Infotainment Systems

    Toyota is the Latest Major Automotive Brand to Leverage Best-in-Class Nokia Mapping Technology using its Local Search for Automotive

    Espoo, Finland - Nokia today announced that Toyota Motor Europe is the latest automotive brand to select the HERE platform's Nokia Local Search for Automotive to power its next generation Touch & Go navigation and infotainment systems. Nokia Local Search for Automotive is a specifically designed solution developed to fulfill the requirements of the automotive industry.

    By leveraging Nokia Local Search for Automotive, Toyota drivers will have fast and easy online access to the latest high-quality industry mapping information and community-generated content - including millions of ratings, reviews and images fed directly into their cars.

    The introduction of this service demonstrates how Nokia's HERE business is continuing to extend its industry-leading portfolio of products to meet the needs of its automotive customers.

    "The ability to deliver comprehensive and driver-relevant content tailored to automotive requirements makes the Nokia Location Platform an interesting proposition," said Derek Williams, General Manager, Telematics & Multimedia, Toyota Motor Europe. "It is an excellent basis for creative location-centric concepts and we are delighted to bring this technology to our customers. Nokia Local Search for Automotive is expected to be commercially available in Toyota systems from early 2014 in Europe, Russia and the Middle East."

    Moving forward, Toyota Motor Europe will collaborate with Nokia to study more services that leverage the Nokia Location Platform, including best-in-class content. Nokia is currently the leading company providing end-to-end mapping, navigation and location solutions for the automotive industry.

    "Nokia and Toyota share the same vision of what the in-vehicle location experience should be - immersive, always on. Today's announcement underlines Nokia's commitment to providing fresh content and services to the auto industry so it can deliver innovative consumer solutions," said Eric Fumat, Vice President Sales & Business Development EMEA, Nokia Location & Commerce.

    Disclosure: I am long NOK.

    Jan 31 8:41 AM | Link | Comment!
  • Nokia - The Strongest Brand In India

    The Nokia stock is keeping falling, today - at the time of writing - the stock is down approx. 4% in pre-markets. I won't do any speculations however my guesses are that the downturn relates to the "tax- dispute" in India and the dividend disappointment from last week.

    Good things are however coming from India, one of the most important markets in the world - as Nokia were yesterday recognized as the most trusted brand - for the 3rd consecutive year. Samsung and Sony were second respective third in the survey.

    Disclosure: I am long NOK.

    Jan 31 6:20 AM | Link | 1 Comment
  • Stock Knowledge - Do Your Homework

    PRICE/EARNINGS RATIO

    Definition

    The P/E, is a ratio showing the relationship between the stock price and the earnings of a company. The P/E ratio is a useful measure to use to see whether a stock is overpriced, fairly priced or under-priced relative to a company's money-making potential.

    The P/E ratio can be thought of as the number of years it will take the company to earn back the amount of investors' initial investment- assuming of course that the company's earnings stay constant.

    The ratio is widely considered to be one of the most important ratios in finance.

    Formula:

    Market Value per Share
    Earnings per Share (NYSEARCA:EPS)

    Example:

    Let's say you buy 100 shares of company A for 6000. Current earnings are 6 per share, so your 100 shares will earn 600 in one year, and the original investment will be earned back in ten years.

    That`s the fundamentals behind the P/E ratio, if we calculate the P/E ratio for company A using the same formula as above we will see that the P/E ratio will be 10.

    60/6 = 10

    Understanding the ratio:

    If you surf into a stock site or any other site showing the P/E:s of listed companies you will probably find out that there are some stocks having P/E ratios of 50 and others having P/Es of 5. What does that mean in reality? It means that investors (The capital market) are willing to take gambles on the improved future earnings of some companies (P/E high), while they are quite skeptical about the future of others (P/E low).

    The P/E ratio of a company is useful only in comparison to other companies in the same industry, to the market in general or against the company´s own historical P/E. It would for an example, not be useful for investors using the P/E ratio of a technology company (high P/E) to compare with a beverage company (low P/E) as each industry has different P/E standards.

    Another interesting thing about the P/E ratio and which you probably will find out when you study companies, is that P/E levels tend to be lower for slow growers (companies that grows slowly) and higher for fast growers (companies that grows faster)

    P/E in the practice

    As understood by our examples above, a company with high P/E must have incredible earnings growth to justify the high price that is being put on the stock. There are many good examples both in modern- and ancient stock times with overpriced stocks falling sharply because over prissiness. This following example is taking from the bestseller "One up on Wallstreet" by Peter Lynch. It is exemplifying the decline in the share price of McDonald's in 1972 relating to its P/E ratio.

    "In 1972 McDonald´s was the same great company it had always been, but the stock was bid up to 75 a share, which gave it a P/E ratio of 50. There was no way that McDonald's could live up to those expectations, and the stock price fell from 75 to 25, sending the P/E back to a more realistic 13. There wasn't´t anything wrong with McDonald´s. It was simply overpriced at 75 in 1972."

    "Remember to avoid stocks with excessively high ones. You will save yourself a lot of grief and a lot of money if you do that. With few expectations, an extremely high p/e ratio is a handicap to a stock." - Peter Lynch, One Up on Wall street 1989

    Asset Plays

    Definition

    An incorrectly valued stock that is attractive because it's combined asset value is greater than its market capitalization

    Understanding the concept:

    An asset play is shortly described as a stock which is priced considerably lower than the value of its firm´s assets on a per-share basis. A paper company may operate in an extremely competitive market and earn minimal profits. Investors tend to focus on earnings and thus price the stock after its minimal earnings. However ,investors in this case have potentially overlooked some extensive and valuable timber, or real estate holdings of the paper company which are not reflected in the current share price (Which we assume is based on earnings only), therefore it is said that the particular stock is an asset play.

    Peter Lynch explains "Asset plays" in the bestseller "One up on Wall street";

    "At the end of 1976, Pebble beach was selling for 14.5 per share, which, with 1.7 million shares outstanding, meant that the whole company was valued at only 25 million. Less than three years later (1979) twentieth century-fox bought out Pebble Beach for 72 million, or 42.5 per share. What´s more, a day after buying the company, twentieth century turned around and sold Pebble Beach's gravel pit - just one of the company's many assets- for 30 million. In other words, the gravel pit alone was worth more than what investors in 1976 paid for the whole company."

    Summary;

    Both the P/E ratio and the knowledge of Asset Play are important when analyzing stocks. While the P/E ratio is used to analyze the particular stock - or part of the company, Asset Plays are more important when looking into the company's balance sheet. This is why it is very important to do the homework and look into the balance sheet of companies, some companies may have different ways of valuing their assets why it is also important to look into the notes of the balance sheet.

    Tags: AAPL, NOK, MSFT, Stocks
    Jan 29 4:05 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.