Nokia or Research In Motion: Which Is the Better Rebound Candidate?

If it were left to just the two of them, the battle for market share, long-term growth, and, yes, even relevance in the mobile marketplace, between Nokia (NYSE: NOK  ) and Research In Motion (NASDAQ: BBRY  ) heading into 2013 would be one for the ages.

Alike in many ways, particularly their respective business stages, there are differences Nokia and RIM investors should consider, particularly if you're looking for growth alternatives. As we move into 2013, both Nokia and RIM are poised with new products, new operating systems, and a hiccup or two from industry-leading Apple (NASDAQ: AAPL  ) . Fans of each are ready to usher in the new year.

The case for RIM
It's been more than a month since RIM CEO Thorsten Heins announced the news RIM shareholders had been waiting for -- BB10 is coming. Loaded with new and upgraded features, RIM's new OS and phones running BB10 are scheduled for worldwide introduction on Jan. 30.

To Heins' credit, he's made it clear RIM intends to focus on what it does best -- provide companies and public sector employees with a secure smartphone experience. Yesterday's announcement that RIM will roll out BB10 on a limited basis to some of its biggest corporate and government clients demonstrates that commitment. What the beta-type rollout also does is reinforce how important it was that RIM received FIPS 140-2 certification before BB10 even hits the streets. Earning the FIPS 140-2 certification means BB10 has already met U.S. government security and user guidelines, allowing for its early testing by the public sector. Nice move; and it should give us some real-world feedback on BB10 sooner, as opposed to later.

As RIM fans are quick to point out, and rightfully so, the company has continued to add to its strong balance sheet, even as sales have slumped. And with more than $2 billion in cash to go along with zero long-term debt, RIM has bought itself plenty of time for the adoption of BB10. Its strong balance sheet, combined with the excitement over BB10, has driven RIM's share price up 51% the past month, for a whopping 92% over the past three quarters.

The case for Nokia
Nokia's share price is also up, a cool 42% in the past month. Like RIM, much of the increase is due to a continuous stream of positive news. Among the highlights are that Amazon.com and AT&T both sold out of their allotment of Lumia smartphones early, and quickly. Also, Nokia's entry-level smartphone alternatives shouldn't be ignored. The introduction of its lowest-priced Lumia yet, the 620, costs a mere $249 without subsidies, making the 620 the least expensive smartphone running Microsoft's (NASDAQ: MSFT  ) Windows 8 OS. The 620 is being shipped to Asia, Africa, Europe, and the Middle East in January, before rolling out to other markets.

The recent deal with China Mobile (NYSE: CHL  ) to supply its 700 million customers with Nokia's made-for-China Lumia 920T, was good news in and of itself. If early indications prove correct, it appears Nokia has a hit on its hands. According to Amazon.com China, the Lumia 920T is the leading, high-end smartphone in its lineup, and that includes the recently released iPhone 5 from Apple. The only problem? Keeping enough Lumias in stock, something that needs to be addressed, now.

Looking ahead
Apple didn't win its most recent court case against Samsung, but it remains the primary competitor to Nokia and RIM in the smartphone industry. Samsung sells more phones worldwide, as does Nokia, but in the high-end, high-margin smartphone market, Apple reigns supreme. Its recent deal to bring back Google (NASDAQ: GOOGL  ) maps has quelled those concerns.

As for Google, its own Nexus smartphone, which is selling more than a million units a month, is just the tip of the iceberg. As it continues to assimilate Motorola Mobility, expect to see more Google smartphone offerings. And you can expect the same from Microsoft, too. The surface tablet was its initial foray into mobile computing, but with Windows 8 off and running, a Microsoft phone won't be far behind.

Both Nokia and RIM are poised for a stellar 2013. Even as Nokia trims non-core businesses, refinances at least part of its debt, and announces early Lumia successes, looking the competitors straight in the smartphone eye has its risks. RIM, as it should be, is attacking the commercial and public sector, a market it could dominate. As for BB10, the upside is tremendous.

So what separates the two? For me, Nokia offers a few things RIM doesn't. Namely, a $6 billion patent portfolio generating $650 annually, and more to follow now that RIM has lost its patent infringement suit to Nokia. Nokia, too, is in a strong cash position, and concerns regarding the continuation of its 6.4% dividend yield (as voiced by many a Fool) are premature. RIM's stratospheric rise in value also makes me wonder how much of a successful BB10 rollout is already factored into its share price.

Finally, a $20 RIM stock price in 2013 wouldn't surprise me in the least -- assuming BB10 meets expectations, that is -- but at $4 a share, Nokia offers even more potential upside. Add in that dividend, along with its upside, and the (slight) edge goes to Nokia.

Nokia, like RIM, has been struggling in a world of Apple and Android smartphones. However, Nokia is making inroads as it banks its future on the next generation of Windows smartphones. Motley Fool analyst Charly Travers has created a new premium report that digs into both the opportunities and risks facing Nokia to help investors decide if the company is a buy or sell. To get started, simply click here now.


Read/Post Comments (18) | Recommend This Article (6)

Comments from our Foolish Readers

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  • Report this Comment On December 18, 2012, at 10:35 PM, never2dull4u wrote:

    Nokia Windows phones are worthless. No apps to make it worthwhile for consumers to pursue. Nokia will be the next Palm.

    Regardless of which, it's really a two legged race between iOs and Android.

  • Report this Comment On December 19, 2012, at 12:20 AM, merechino wrote:

    Namely, a $6 billion patent portfolio generating $650 annually,

    What did you smoke?

  • Report this Comment On December 19, 2012, at 12:32 AM, never2dull4u wrote:

    When the CES Show comes around in the next 3 weeks, we will see RIMM and NOKIA crash and burn.

    When I first saw RIMM's Playbook at the CES, I immediately shorted the stock. NOKIA will have nothing to showcase (as usual).

    As for Lumia 920 being on Amazon top seller? Big deal! Last time I heard that was on the Garmin forum (Nuviphone). Get my drift...?

  • Report this Comment On December 19, 2012, at 12:39 AM, blueofblue wrote:

    both will be in the water! or u take the risk

  • Report this Comment On December 19, 2012, at 6:30 AM, timbrugger wrote:

    merechino,

    No smoke, or mirrors, for that matter. Somehow, the 'million' of the $650 million got lost in the shuffle! Good catch, and thanks for the post.

    Actually, thanks for all the posts and additional insights Fools! Tim.

  • Report this Comment On December 19, 2012, at 8:36 AM, chrissofool wrote:

    Both Nokia and RIM are poised for a stellar 2013? No they won't.

    The reasoning behind is straight and simple, seems almost foolish to some extent, but it's what got me accurately predicted the reign of Samsung 2 years back, and the need of phablet existence about 13 years ago while i was doing tele engineering, when then almost all mates around paid zero attention to what I said.

    It's the Operating System that drives the sales of phones.

    The magic didn't come from phone makers themselves.

    Think again. Samsung success, mainly due to their efforts in matching every features available in the latest android kernel, sensors, libraries, etc. Make sense?

    This is where RIM or Nokia, which was once the king of Smartphones/Feature phones, has fallen short.

    People will never get accustomed (or liked) to Microsoft being the king of OS in few-inch devices. Nothing to do with their lack of talents, merely a branding being long embedded in our mindsets. Linux/Unix for enterprise, Microsoft for PC. MS won't champion both parallel lines at the same time. And yes I was basically talking about Al Ries's theory of positioning.

  • Report this Comment On December 19, 2012, at 9:45 AM, CALVINVONWELCH3 wrote:

    What has happened is the sleeping giant that is Nokia has been awoken. trust me the tech world is gonna have problems now. alll the futuristic communication devices that you have seen in sci- fi films is where Nokia is aiming now. the first wearable phone will come for Nokia. believe that! the dust has been blown off of those patents and its clobbering time!!!! Trust that research is being done at this moment to bring to market the Nokia 888 (Google it) Dick Tracy, bitch! (if you don't know, Google that as well) the bendable glass has been developed, how long before that liquid battery challenge is overcome? Oh in case you think i'm too futuristic. (those holograms you see in the movies nokia will be all over that as well. keep your eye on their acquisitions in that space). (Chess players think many moves down the board) How long do think it will be before nokia drops a tablet? and just in case you think im still being a little to forward looking, WHO CAN MAKE A DOLLAR IN SMARTPHONES AND NOT HAVE TO PAY NOKIA???? That fact ALONE is why I got in July 17th @ $1.77. THE BEST MOVE OF MY LIFE!!!!! HAHAHAHAHAHAHA!!!!! There is NOTHING SWEETER than being SMARTER than the "experts", (I'M WATCHIN JIM CRAMER ON CNBC RIGHT NOW) AND LAUGHING IN THE FACE OF THE NOKIA HATERS!!!!!!!

    ALL THE WAY TO THE BANK!!!!!!!! HAHHAHAHAHHAHAHAHHAHAHAHAHA

    LONG NOKIA!!!!!!! I promise you, they should've let Nokia remain asleep! (NOKIA-$100)

  • Report this Comment On December 19, 2012, at 10:46 AM, kthor wrote:

    think tons of people are selling apple, buying Rimm and Nok for the appreciation 2013!

    then it's PC's turn to surge 2014! lol

  • Report this Comment On December 19, 2012, at 11:13 AM, mirra88888 wrote:

    Rim reminds me of Pier One Imports. I bought Pier one on Mar, 1 2009 for 25 cents. Everyone thought the company is going out of business. Pier one had forgotten what people really want when it comes to home decorating and people were not buying their stuff any longer. They realized their problems and their buyers started paying attention to what public wants from them. The management got rid of all the waist and they came back and boy did they come back big!!!

    I am sorry to say that I sold the stock for 50 cent One month after I bought it thinking that I have doubled my money and did not want to loose the profit. Pier One never stopped appreciating. the stock is $20.95 today.

    Rim has realized what people want in a phone. From what I have seen so far, BB10 will be the best phone on the market. I own Apple and Rim because I think people will get rid of their computers and use their cell phones instead. I like Apple, however for making big money, I am counting on Rim. The stock has doubled in just a few months and I think it will go up to $40s if not more in the next 6 to 8 months. I am not selling my Rim.

  • Report this Comment On December 19, 2012, at 11:55 AM, CALVINVONWELCH3 wrote:

    you should've held that prier 1 hahahahahahahahaha

  • Report this Comment On December 19, 2012, at 11:56 AM, CALVINVONWELCH3 wrote:

    i meant pier hahhahahahaha

  • Report this Comment On December 19, 2012, at 12:11 PM, Essjaycee wrote:

    I sold out of Nokia for a good profit as they neared $4 - and I actually handled a "920". It is a big uncomfortable phone to use, and I think that most established smart phone users will stick with their preferred brand. I see nothing appealing in the new Nokia, and believe that they are selling it with a painfully slim margin to gain market share - when what Nokia needs is profit. I initially bought into Nokia for the dividend, then changed my mind, as a responsible board should cut the dividend payout next year.

  • Report this Comment On December 19, 2012, at 12:15 PM, tuckman52 wrote:

    I have considered selling my NOK, which I bought because I believed it was a functional company with cash in the bank, that had merely lost its way. Time will tell, but NOK is doing a lot of things right, including the the 920 and the 620. I also think their enterprise value is being discounted by the market. I'm not predicting a blowout, but rather a steady accretion of sales based on business adoption of their phones and systems. I have nothing but admiration for AAPL, but everybody comes after you when you are a market leader. The smartphone venue is large enough for all the players; it comes down to the perception of each consumer what they pick (although I envision some instances when the boss tells them to buy a Windows phone for work).

    But NOK is more than a phone manufacturer, and all the other components are profitable. So, the market may be "disappointed" when the numbers come out on Jan. 24th, but if it goes down some, I'll buy more. It looks as if 2013 is their year. Sincerely, tuckman52 Long NOK

  • Report this Comment On December 19, 2012, at 2:34 PM, AdaJohansson wrote:

    Nokia is a better choice than Research In Motion.

    Nokia is a very good candidate for a big short squeeze.

    Because the stock has been over sold.

    Nokia is the most short sold stock in both Helsinki and New York!

    NOK short interest:

    NYSE November 30

    295,118,232 shares

    Helsinki December 6

    10.7% (with investors over 0.5%, below 0.5% not listed)

    Nokia´s total share number (approximately 3.75 billion shares) covers both New York and Helsinki.

    That makes the sort interest in NOK around 20%!

    Morningstar´s analysis about Nokia:

    Estimated price: intellectual properties over 1 euro per share (Motorola´s patent portfolio was worth about $5.5 billion); other business parts (smartphones, featurephones, NSN) at least over 1.50 euro per share.

    And NAVTEQ´s price not included (Nokia bought NAVTEQ with 5.7 billion euro). All in all, even in this case, Nokia share price would be at least over 2.50 euro, excluded NAVTEQ! And Nokia´s net cash is now 3.6 billion euros.

    In other words, the sum of parts of Nokia and net cash are worth much more than its market cap now, which means NOK share is right now heavily undervalued.

    Nokia Is Still Extremely Cheap

    The company has since partially offset these fears with excellent cash management, restructuring aimed at reducing costs, and more recently, its better than expected 3rd quarter results. The company achieved operational profitability (1.1% non-IFRS) with better than expected revenues, triggering a 20% increase in stock price. As the table below shows, these factors have enabled Nokia to maintain a healthy interest coverage ratio and quick ratio (nearly equal to the industry average), dispensing any immediate liquidity concerns.

    Company

    Industry

    Sector

    Quick Ratio (MRQ)

    1.16

    1.62

    1.64

    Current Ratio (MRQ)

    1.28

    1.96

    3.01

    LT Debt to Equity (MRQ)

    48.76

    22.29

    10.61

    Total Debt to Equity (MRQ)

    66.45

    39.67

    19.69

    Interest Coverage (TTM)

    4.9

    4.91

    164.78

    Figure 1: Financial Strength/ Reuters

    Valuation

    Nokia is currently operating at a loss and the sell side expects the company to become profitable, somewhere in 2014. The stock is very volatile, as can be assessed from the 100% run in the last 6 months. I believe Nokia’s share price will continue to fluctuate with short term catalysts and it’s still pointless to value the stock on 2014 earnings given the uncertainty. Instead, investors should value the company on a worst case scenario. I believe at this point, Nokia’s biggest assets are its impressive patent portfolio, Cash, NSN and Navtaq.

    I have used three recent patent sales to get an approximate value per share for Nokia’s current patent portfolio.

    $ millions

    AOL (AOL) Patent Sale

    Vringo (VRNG) Purchase

    Nortel Networks

    No. of Patents Sold

    800

    500

    6000

    Sales Value

    1100

    22

    4500

    Price Paid Per Patent

    1.4

    0.0

    0.8

    No Nokia Patents

    9500

    9500

    9500

    Patent Portfolio Value

    13063

    418

    7125

    Shares Outstanding

    3830

    3830

    3830

    Per Share ($)

    3.4

    0.1

    1.9

    Average Price Per Patent

    0.79

    Average Patent Portfolio Value

    7316

    Average Per Share Value ($)

    1.91

    Figure 2: NOK Source: Google Finance

    As the calculations show, the patent value per share of Nokia’s patents comes down to $1.91 per share. According to Nokia’s disclosures, the company ended Q3 with gross cash of $11.5 billion (EUR 8.8 billion). The Q3 results also indicated that Nokia had EUR 288 in currently maturing debt and EUR 1.1 billion in short term borrowing. Deducting other liabilities, we arrive at a net cash position of $4.7 billion (EUR 3.6 billion). This comes down to a per share amount of $1.22, and adding the per share patent value of $1.91, the value of cash and patents together is $3.13.

    Bottom Line

    Nokia still trades way below its salvage value. The company’s patents and net cash, alone are worth $3.13 per share. This of course does not include Nokia’s Navtaq business and NSN (Nokia Siemens Network). These divisions continue to be profitable, despite problems of Nokia’s smartphone division. In Q3 NSN sales were EUR 3.5 billion and operating profit was EUR 323 million; the operating profit of location and commerce segment was EUR 37 million. The combined value of Navtaq (3x sales for $3 billion) and NSN (0.5x sales for $7 billion) is around $10 billion ($2.6 per share). This gives us an approximate per share value of $5 for NOK. Therefore, Nokia is still trading at a discount to its salvage value and is an excellent value opportunity.

  • Report this Comment On December 19, 2012, at 2:39 PM, PaulDEJ wrote:

    InfoThatSucks - I reserved you a BB10 handset at Verizon because I know you will never admit it here, but actually you are dying to have one. I know you admire RIM for the fact that they are able to bring out a brand spanking new, iOS butt kicking OS with BB10. I know you admire how the company will be turned around and how the stock price has doubled recently. You admire how BB10 will be big in 2013 and the future, while apple's boring stale iphone and 7 year old ios will start to crumble and will be surpassed by BB10, Android, and Windows Phone and the leaderless apple will only be able to respond with the iphone 5s, which has a bigger screen to fit more icons and a bigger home button, because home buttons is still 'the thing'. Enjoy BB10 and drop me a BBM to thank me!

  • Report this Comment On December 19, 2012, at 3:05 PM, PaulDEJ wrote:

    InfoThatSucks - I reserved you a BB10 handset at Verizon because I know you will never admit it here, but actually you are dying to have one. I know you admire RIM for the fact that they are able to bring out a brand spanking new, iOS butt kicking OS with BB10. I know you admire how the company will be turned around and how the stock price has doubled recently. You admire how BB10 will be big in 2013 and the future, while apple's boring stale iphone and 7 year old ios will start to crumble and will be surpassed by BB10, Android, and Windows Phone and the leaderless apple will only be able to respond with the iphone 5s, which has a bigger screen to fit more icons and a bigger home button, because home buttons is still 'the thing'. Enjoy BB10 and drop me a BBM to thank me!

  • Report this Comment On December 19, 2012, at 3:19 PM, AdaJohansson wrote:

    China Mobile sells Lumia 920T for 4599 yuan, but with wireless charging pad or other gifts. So the phone costs only about 4000 yuan.

    It is much cheaper than Galaxy Note II or iPhone 5.

    Bloomberg reported, in Sweden consumers returned iPhone 5 and changed it into a Lumia 920, because iPhone 5 does not work in 4G there and the Lumia 920 works.

    Actually, iPhone 5 works only on two 4G networks in Europe, while Lumia 920 works on two dozen 4G networks there.

    T-Mobile Germany Forced to Offer the Nokia Lumia 920 Due to High Demand.

    PhoneArena just chose Nokia´s PureView camera technology in phones as the best innovation of the year. Also Lumia 920 belongs to the best product designs of the year.

    Lumia 920 wins Gizmodo Australia’s Mobile Phone of the Year 2012 People’s Choice Award.

    The Independent UK calls the Nokia Lumia 920 “the most advanced smartphone on the market”.

    1. Nokia Siemens Networks is profitable and growing strongly (over 300 million euros profit in 3Q). Nokia and Siemens have decided to make it independent in these few years, therefore Nokia shareholders will have two companies´ shares in their hands, quite a good bonus.

    2. Navteq is profitable as well, and it is expanding its business as the world´s leading maps maker, with City Lens and Earthmine´s 3D mapping, Nokia will have a bigger slice of this pie yet.

    Right now, Navteq already has big clients such as Yahoo, Facebook, Amazon, Mozila, Oracle and almost countless car companies. Navteq just reported it is building navigators into 4 out of 5 cars (80%), with the new cars with navigator built in.

    3. Nokia´s patent portfolio earns about 500 million euros a year.

    Samsung is paying Apple for intellectual property rights; HTC is paying Apple; Vringo is suing ZTE; Nokia is suing HTC; Ericsson is suing Samsung; and APPLE IS PAYING NOKIA FOR INTELLECTUAL PROPERTY RIGHTS!

    Thus, it is only a matter of time when Nokia will sue Google and Samsung, if they still don´t agree to pay Nokia for its patents.

    4. Nokia´s featurephone division is doing well, because of Asha phones.

    5. The only 1 out of 5 Nokia´s business parts, which is not profitable, is smartphone business, but new Lumia generation looks promising.

    Lumia 920 has features like:

    Floating-lens PureView camera with optical image stabilization

    Wireless charging

    Super sensitive and bright screen that can be used with gloves or finger nails

    Premium GPS that can be used also without internet

    Augmented reality City Lens!

    Free music with no ads

    NFC

    Rich sound recording in vids

    Fastest screen on a smartphone!

    Wireless Purity Pro headphones

    Wireless speaker that can charge your phone wirelessly

    LTE

    Nokia also bought Scalado, the imaging technology firm in Sweden. Therefore, apart from NAVTEQ and NSN, Nokia is no doubt going big with PureView imaging technology. Some authors compare Nokia to Kodak, I think it is almost the opposite.

    Kodak was the old era and Nokia is starting the new evolution with smart-phone imaging, when consumers won´t have to carry another gadget (camera), for example during traveling.

    6. Considering now the total loss is about 17 million euros, it got much better from the 290 million (2 prior quarters each) loss.

    Nokia´s current 3.6 billion euros net cash should be enough for Nokia´s transitional period before WP8 phones take off.

    Nokia is also getting more cash from convertible bonds and selling its headquarters and other non-core assets.

    Morningstar´s analysis about Nokia:

    Estimated price: intellectual properties over 1 euro per share; other business parts (smartphones, featurephones, NSN) at least over 1.50 euro per share.

    And NAVTEQ´s price not included (Nokia bought NAVTEQ with 5.7 billion euro). All in all, even in this case, Nokia share price would be at least over 2.50 euro, excluded NAVTEQ! And Nokia´s net cash is now 3.6 billion euros.

    In other words, the sum of parts of Nokia and net cash are worth much more than its market cap now, which means NOK share is right now heavily undervalued.

    7. Nokia´s 3.75 billion shares outstanding,

    covers both Helsinki and New York.

    In other words, the short interest in NOK has been around 20% (Helsinki + New York) on a base of 3.75 billion shares.

    This is a significant figure to note, because for example, shares of Apple have been short sold only about 0.5%, Samsung over 2% and other telecom companies about 4% in general.

    Therefore, the real short covering of NOK is still to come yet.

    8. The only 1 out of 5 Nokia´s business parts, which is not profitable, is smartphone business, till now.

    And the EPS in last quarter (3Q12) was only -0.07 euro per share any more.

    A few days ago, Yahoo-China site said that it has the approximate number of Lumia 920 that has been ordered from Nokia up to date, and it was about 2.5 million units. And this number of Lumias 920 alone is already close to the total number of all the Lumia variants sold in last quarter, 3Q12, which was 2.9 million units only.

    Apart from Lumia 920 and 820 variants, Nokia has been pushing at the same time the sales of Lumias 510, 610, 710, 800 and 900 with campaigns and discounts.

    For example, Lumia 800 has gone back into top ten charts in many countries.

    Kantar reported that WP phones have reached 11.7% market share in Italy.

    The two hit phones are Lumia 610 and Lumia 800 there.

    ABG Sundal Collier said in their report that the Lumia 920 makes people interested in it and marks the comeback of the brand of Nokia.

    Liberum upgraded NOK from “hold” to “buy”.

    Nordea has upgraded from “buy” to “strong buy”.

    RBC kept their “Market Perform” but raised target.

    Northland Securities also raised price target.

    Nokia launched Asha 205 and Asha 206.

    In these two new Asha phones, Nokia has a new innovation called “Slam” with which you can share photos and videos between the phones, and don´t have to even pair them up like NFC. Also Facebook etc and 40 most popular games in the world are in these phones, which make it hard for manufacturers to compete featurephones with Nokia.

    Nokia´s WP8 phones will be available in more markets, because they also support Arabic now.

    China Mobile (the world´s biggest carrier with about 700 million subscribers) has also confirmed Lumia 920T arriving December!

  • Report this Comment On December 19, 2012, at 3:20 PM, AdaJohansson wrote:

    Nokia did announce a couple of months ago (when asked why it bought Norway´s Smarterphone but has not used the OS) that Nokia bought Smarterphone because of the company´s expertise, in order to develop Nokia´s feature phones which are going to be kind of half smartphones right now, e.g. the newest Asha 205 and Asha 206, in which there are features like Facebook, Twitter etc and internet access to thousands of Nokia´s most popular apps.

    Either Nokia has integrated Smarterphone into S40, we don´t know, but the fact is Nokia´s feature phones have become really smarter!

    Apart from the features I mentioned above in the new Asha phones,

    Nokia has already brought an app called Nearby (which is almost the same as Lumia´s City Lens) into Asha phone line!

    In addition to all these, Nokia has 40 most popular games of the world in these Asha phones for free. And Asha 205, 206 is only $60 without any contract at all. And Nokia´s Asha phones are profitable, that is one really important thing to keep in mind, because almost 2/3 of the world´s population is still using a featurephone!

    As Nokia has said, with these Asha phones Nokia is targeting the next billion people to reach internet. There is still a huge opportunity out there which even Android can not target (because cheapest android right now is above $100 and Asha is only $60), not to mention iOS!

    Asha phones were and have been profitable.

    Actually, all the other 4 Nokia´s business divisions (Navteq, NSN, intellectual property rights and feature phones) were profitable in 3Q12, except smartphone division. And the total EPS was -0.07 euro per share, while the consensus was -0.11 euro per share. In other words, Nokia has beaten expectations and estimations (and to be exact, this has already happened in the last two quarters, with beating consensus. Those are ones of the most important reasons why NOK stock has jumped from its lowest this much)! The news of the last two weeks are only part of the whole reason.

    And at this price, NOK is still undervalued!

    Morningstar´s analysis for the whole Nokia:

    Estimated price: intellectual properties over 1 euro per share (Motorola´s patent portfolio was worth about $5.5 billion); other business parts (smartphones, featurephones, NSN) at least over 1.50 euro per share.

    And NAVTEQ´s price not included (Nokia bought NAVTEQ with 5.7 billion euro). All in all, even in this case, Nokia share price would be at least over 2.50 euro, excluded NAVTEQ! And Nokia´s net cash is now 3.6 billion euros.

    In other words, the sum of parts of Nokia and net cash are worth much more than its market cap now, which means NOK share is right now heavily undervalued.

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