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3 Reasons Nokia Is Due To Rally After That Dip

May 03, 2022 7:19 AM ETNokia Oyj (NOK)CSCO20 Comments


  • Nokia posted good first-quarter results and guidance.
  • Dividend re-instatement a positive development.
  • Fair value of over $6.00 for a 28.5% return discussed.
  • Looking for a helping hand in the market? Members of DIY Value Investing get exclusive ideas and guidance to navigate any climate. Learn More »
Nokia Lumia Microsoft Widowsphone

AdrianHancu/iStock Editorial via Getty Images

After posting first-quarter results, Nokia (NYSE:NOK) rallied at first only to close lower on April 28, 2022. Nokia’s 20-day and 50-day moving average became resistance zones. In chart reading terms, traders are selling NOK stock whenever the stock tried

This article was written by

Chris Lau profile picture

Chris Lau is an individual investor and economist with 30 years of experience covering life science, technology, and dividend-growth income stocks. He has degrees in Microbiology and Economics.

Chris runs the investing group DIY Value Investing where he shares his top stock picks of undervalued stocks with catalysts for upside, dividend-income recommendations with quant and payment calendar tracking, high upside plays, and research requests to help you become a better do-it-yourself investor. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NOK over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (20)

Chris Lau profile picture
Per SA, NOK Q2 Non-GAAP EPS of €0.10 beats by €0.02.
Revenue of €5.9B (+11.1% Y/Y) beats by €290M.
Gross margin of 40.6%, Operating margin 12.2%.
Re-affirms FY22 outlook: FY net sales outlook is EUR 23.5bn to EUR 24.7bn.
Comparable operating margin guidance remains 11% to 13.5%.
Segment Op. margin guidance: Mobile Networks 6.5-9.5%.
Network Infrastructure 9.5-12.5%.
Cloud and Network Services 4.0-7.0%.
Nokia Technologies >75%.
Free cash flow of 25-55% conversion from comparable operating profit.
Yes....ummmm....hasnt it been due for a rally since 2014?
Chris Lau profile picture
@red777 I've had a readership base for Nokia for that long. And so, it's one of the stocks I write about.

NOK stock resumed its sell and blow off phase again.
@red777 I've still got high hopes for NOK, but currently it's going through some of the same problems nearly the entire tech sector is experiencing, with hawkers trying to peddle everyone out of tech/growth and into value stocks this year. I'm sitting on 500 shares I picked up for $4.20 in February of last year, so I watched it rally up over the $6.30 mark back in December. While the YTD is looking a bit rough at -23%, the 52 wk is only down a touch over -10%. Compare that to the rest of the industry and I think NOK's sitting tight and doing alright. The buybacks and the reinstated dividend are probably helping to some degree, but I think it's in large part due to the multitude of irons they have in the fire dealing with 5G-related products and systems. Going forward over the next few years, I'm expecting they'll really start reaping the rewards from all this wheeling and dealing they've been doing, even if it might be like waiting to watch water boil for a bit longer here ....
DanTheMan1984 profile picture
Going to add more if this gets to 4.50 the stock is certainly undervalued
op2788 profile picture
@DanTheMan1984 just sell puts (get the premium and wait)......Premiums are pretty tasty on the put side
@DanTheMan1984 since when?
Hope you bought today Chris. Finally heading back to over $6 soon. Good luck.
@millzee32 I was way off just like normal on NOK. Finally back to above the $5.14 number it was when this article came out. Should be nothing but blue skies ahead if this behaved like a normal stock which it does not.
Rlogranite profile picture
A rally for this stock is 15 cents increase. Won't be much more than that before April of 2023
@Rlogranite I'll take 15 cents a day for about 50 days or so.
BarkingShark profile picture
Ten year average price of $5.00 a share. Can’t even Sell Covered Calls with their low IV.
op2788 profile picture
@BarkingShark unless you are a rookie and i doubt it, you can sell whatever calls you wants. I`ve done a living selling nokia calls......Just sell $6 December or Jan2023 and you get some money.....

If you are so sure that Nokia will stay at $5 for very long time, selling $6C is just easy peasy......

Again, before you write some nonsense like you just did, probably good to do some DD
@op2788 Sell $7 and $10 LEAPS for the last 5 years and make free money. Pretty sad actually. I pray one day these shares get called away from the sellers. Long NOK.
Appreciate the article as always Chris. I first entered Nokia in the summer 2020. Now the position is around 3000 shares at 3.62 (EUR) It is therefore a significant holding for me and I do appreciate your articles on Nok.

For me I would like to work in order to decide whether to buy more shares what presented better value: a) Nok at 3.62 in 2020 or b) Nok now at 4.92 - any thoughts?
Thanks for a useful article. I've been long Nokia since February of last year, with a very modest 500 share investment at the $4.20 SP mark. I have thought a few times about adding more along the way but my investment cash is limited and my choices are many. Still, of all the stocks I've trimmed, dumped or sold off in that past year, NOK is one I've been hands off on, as I'm still fairly convinced it's going to eventually reap much larger rewards from all the contracts it continues to get related to 5G and other services. I wasn't huge on them needing to reinstate a dividend, but I don't bash them for doing so. What I've seen so far out of Pekka and crew gives me confidence to stay the course for at least a few years out with the stock.
Chris Lau profile picture
@CrimsonPhoenix NOK stock is one of many on my hold and be waiting forever list at the marketplace* . Because our core model also trimmed, dumped, or sold (especially just before the Jan 3 tech peak), stocks that take a few quarters to play out are parked on that wait forever list.

* seekingalpha.com/...
matratra profile picture
Chris- Your prior calls are worse & I've no good reason to buy NOK or others. CSCO, we are not worried about it.
Chris Lau profile picture
@matratra Join here free. 2000 followers and growing - my a/c name is "@ diyvalueinvestor"
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