Is Nokia a Classic Value Trap?

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Nokia just issued another profit warning and a plan to cut 10,000 jobs. What’s more, the company is burning cash in the process, which is not a good sign. The writing has been on the wall for some time now. The company, like Research In Motion, is losing market share to Apple and Google in terms of operating systems. Nokia may have been the king of the feature phone, but that has not translated into success in smartphones. The company, sadly, has become a classic value trap -- a declining business disguised as a cheap stock. The best way to play the mobile space right now is to buy the leaders: Apple and Google. Their market share numbers keep going up at the expense of other players. We own shares for our 10-Bagger portfolio and find them both very attractive today.

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David Meier owns shares of Apple. John Reeves owns shares of Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, Microsoft, and Nokia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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