The Most Surprising Tech Stocks of 2012

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Austin Smith: All right, guys, we're here in The Motley Fool Dojo, doing an After-Hours Stock chat.

I want to throw a question your way and see which stocks really surprised you guys in the tech space in 2012. I know you guys both cover the sector. What stocks really surprised you with their outperformance?

Eric Bleeker: Andrew, do you want to go first?

Andrew Tonner: I can say at least that, over the last several months, a couple of stocks that people left for dead -- Nokia  (NYSE: NOK  ) and Research In Motion (NASDAQ: BBRY  ) -- have both been some of the top performers in the sector over the last three months.

They're at least up 75%, almost approaching a double from these companies that people largely had given up on. I think, in the case of Research In Motion at least, now you're seeing the conclusion of the storyline where they had no products to ship because we know BB10 will be coming out on Jan. 30, and then they'll be launching a series of products in the following months.

They keep kicking this product launch down the line and down the line; I think that was a drag on the stock. That's not to say they're going to make money any time soon, but at least there's a timeline for that now. Investors have something they can anchor their expectation on. I think that's been a real boost.

The second thing I think has turned around the stock as well has been a little bit of consistency coming from management. They got rid of the two-CEO structure now, there's some clear leadership.

Say what you will about Thorsten Heins, he's largely still unproven. He hasn't really shipped a flagship product that he can really hang his hat on, but again, now there's some level of consistency, and at least investors know what to expect here.

That being said, I'm definitely not bullish on this continuing. I think Apple  (NASDAQ: AAPL  ) and Google (NASDAQ: GOOGL  ) are going to still retain their spots at the top of both the tablet and smartphone space, but you want to talk about surprising, those are two stocks I wouldn't have said would be some of the strongest performers going into the end of the year.

Austin: Yeah, I definitely did not see that one coming.

Eric: Not a lot of us did.

Austin: What about you, Eric?

Eric: I think we really need to look at the death and rebirth of social media as a real interesting storyline this year. It's a tangent storyline to mobile in general. We saw Facebook (NASDAQ: FB  ) immediately come down after its IPO. It was the story of the year; it was getting absolutely crushed, and now people are rebuying on mobile.

Not only that, but a company like LinkedIn  (NYSE: LNKD  ) -- I love LinkedIn, I love its recurring revenue model -- I think it is incredibly disruptive to recruiting itself. I think investors out there who aren't buying in should take a second look, but they didn't collapse at all during the entire Facebook thing, and they're now sitting very pretty.

You've got a company that, by all means, I was expecting to crash with the rest of social media stocks, and LinkedIn soaring, and now you've got Facebook with this negativity cycle, making a comeback. I think it's a really fascinating storyline across the year.

Whether they can continue that mobile storyline in 2013 now becomes a dominant mobile theme across the next year for investors to watch.

Austin: Definitely.

Eric: What about you?

Austin: I don't have one.

Eric: You don't have one at all?

Austin: No. [laughs]

Eric: That was interesting.

Austin: I already did three videos on it, so I can't do any more.

Andrew: I would note too, though, that we are seeing a lot of the companies are kind of tied to the same sector, the Web 2.0 companies as well, that are trading in lockstep with Facebook -- the Zyngas and Groupons -- have also been strong performers the last several months as well; probably something investors didn't really see coming their way.


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  • Report this Comment On January 04, 2013, at 2:50 AM, EmiliePortman wrote:

    The Global mobile Suppliers Association (GSA) forecasts the number of commercially launched LTE networks to nearly double this year with expansion to 75 countries from 51. Since Nokia Siemens Networks (NSN) is an early mover in LTE, NSN is expected to provide a meaningful tailwind of network infrastructure business. NSN had a remarkable operating profit in 3Q.

  • Report this Comment On January 04, 2013, at 2:55 AM, EmiliePortman wrote:

    NOK short interest as of December 2012:

    NYSE

    281 million shares

    Helsinki

    11.38% (with investors over 0.5%, below 0.5% not listed because of EU rules).

    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%!

    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!

  • Report this Comment On January 04, 2013, at 2:58 AM, EmiliePortman wrote:

    WP 7.5 phones such as Lumi 800 and Lumia 610 are still selling well because of the price cut, and the phones are also getting update to WP 7.8.

    Nokia is flooding the markets with these WP 7.8 phones in order to make the ecosystem grow (maybe with thin profit or no profit, but it is very important, and it is worth it).

    The encouraging things in Nokia are:

    Nokia has both low end competitive Asha phones and also high end competitive WP8 Lumia phones.

    In addition, apart from phones, Nokia has other business units like NSN, Navteq and patent portfolio.

  • Report this Comment On January 04, 2013, at 3:08 AM, EmiliePortman wrote:

    Nokia's share price is significantly down from the $15 it saw only 2 years ago. Now the stock is only over $4.

    Nokia´s Asha phones are competing with low-price androids. Asha phones have many smartphone features and thousands of Nokia´s most popular apps right now and also Facebook and Twitter etc, and even 40 most popular games in the world for free in these phones. Asha phones are only about $60 without any contract, while cheapest android is still about $100.

    Nokia is also saving money in R&D, because it has teamed up with Microsoft.

    Nokia is actually a BUY and hold for 2013.

    Reasons:

    1. China Mobile deal

    2. Nokia is now getting royalty payment also from RIM

    3. Lumia 920 is heading to more markets

    4. Budget WP8 phone Lumia 620 is hitting the markets this month

    5. Nokia is likely launching a tablet. I don´t expect much, but even some Nokia´s loyal fans around the world will buy some Nokia´s tablets, that is a good gain for Nokia.

    6. According to CEO Stephen Elop, Nokia is planning a lot of interesting things with Verizon!

    China Sets 100 M 3G Customer Goal

    People’s Republic of China – the biggest telecom market in the world by subscriber base has set an ambitious goal for the forthcoming year. Additionally, the East Asian country expects 3G subscribers and broadband Internet to collectively propel growth in 2013. According to China’s Ministry of Industry and Information Technology (:MIIT), the country expects to add 100 million 3G subscribers with the number of broadband Internet users to increase by 25 million in the coming year.

    China Mobile is planning to offer Nokia Corporation’s (NOK) Lumia 920T at a very low cost, which is expected to increase its 3G customer base even further.

    At over $4, Nokia is a good bargain.

    Nokia has spent over $55 billion in R&D alone, now Nokia´s market cap is only about $15 billion. A couple of years ago, Nokia was still about $15, and NOK used to be over $60!

  • Report this Comment On January 04, 2013, at 3:09 AM, EmiliePortman wrote:

    Awards Won By Nokia Lumia 920

    The Top Smartphone of 2012, V3, UK

    The Best Mobile Phone of 2012, Readers Choice Award, Gizmodo, Australia.

    iF Award for Outstanding Design, International Forum Design, Germany

    Mobil Award for Best Smartphone Design, Mobile Magazine, Denmark

    Best Smartphones of 2012, The Next Web, USA

    Top Score Award, Mobil, Sweden

    The Best High End Smartphones for the Holidays, CNET, USA

    Best Productivity Phone, Best Camera Phone, Best Mapping Phone, Best Windows Phone, Runner up, Arstechnic, USA

    Top 25 Tech of 2012, Mashable, USA

    Top Smartphone of the Year, Mybroadband, South Africa

    Best AT&T Smartphones of 2012, BGR, USA

  • Report this Comment On January 04, 2013, at 3:19 AM, EmiliePortman wrote:

    Many investors who bought NOK with over $10 are still holding the shares patiently, therefore I think investors who have a chance to buy NOK with only over $4 should use the chance.

    In the last few months alone, Nokia has launched a number of phones ranging from cheapest to most expensive in many markets around the world. As we speak, Nokia's current line of phones sell like hot cakes and the company doesn't need to introduce a new phone to the market every month to see consumer demand, in this case I mean at CES, as some authors claim why Nokia is not participating at CES this year. For example, Apple (AAPL) has been able to build the strongest brand name in the world by simply introducing one or two new phones in the market every year. Of course, Nokia can't be compared to Apple at the moment, but the company surely has enough new products in the market to attract consumers for the time being.

    Additionally, Nokia has already announced they skip CES just because they are concentrating on bigger projects at MWC.

  • Report this Comment On January 04, 2013, at 3:21 AM, EmiliePortman wrote:

    If you do a better research, you will see, actually WP phones were sold more than iPhones or androids in their debut year.

    Nokia reported Lumia phones were sold about 10 million units from November 2011 to the end of September 2012.

    iPhones and adroids were sold a lot less than Windows phones in their first quarters!

  • Report this Comment On January 04, 2013, at 3:27 AM, EmiliePortman wrote:

    In 2013, Nokia has much on its sleeves, for example RIM´s royalty payment, the deal with China Mobile and China Unicom, Verizon is also planning team work with Nokia.

    Lumia 920 is heading to more markets. The budget WP8 phone Lumia 620 is hitting the markets this month. A tablet is likely to be launched soon. If only Nokia´s loyal fans buy some Nokia´s tablets, it is also some gain for Nokia.

  • Report this Comment On January 04, 2013, at 3:32 AM, EmiliePortman wrote:

    Lumia 920 has awsome and advanced features like:

    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

  • Report this Comment On January 04, 2013, at 3:34 AM, EmiliePortman wrote:

    When now, both China Mobile and China Unicom are subsidizing the Lumia 920 heavily, the 2-year or 3-year contract is starting from

    0 or 1 yuan, and considering only less than 1/5 of Chinese people are using highest-end smartphones, now even middle class Chinese people have a chance to use a highest-end smartphone because of China Mobile´s and China Unicom´s Lumia 920 deals.

    This will result into a huge number of 2-year or 3-year contract users for Nokia in China! Besides, 3G penetration in China is still very low, there is a huge opportunity there.

    Additionally, among the highest end phones, Nokia Lumia 920 is significantly much cheaper than for example iPhone 5 and Galaxy Note II. Nokia has an advantage in both the price competition and the biggest carriers´ backing in China!

  • Report this Comment On January 04, 2013, at 3:36 AM, EmiliePortman wrote:

    Nokia has a brighter future than RIM

    1) BB10 is a bit late!

    2) RIM has been strong in enterprise business, but now RIM will face

    more than tough competition. For example, In China China Mobile sells the Nokia Lumia 920T for 4599 yuan with free wireless charging pad or other accessories, which means the phone costs only 4000 yuan. The phone is very much cheaper than iPhone 5 or Galaxy Note 2.

    In addition, the Lumia 920T has premium malware virus protection hardware built in.

    Therefore, will RIM´s highest end BB10 phone able to compete the price with this Lumia 920T? I really doubt that. And with a 2-year contract, China Mobile offers the Lumia 920T with only 1 yuan!

    3) RIM´s loyal fans will still support BB10 phones, but will that be enough?

    4) Beside Apple and Samsung, RIM will have to compete also with Nokia.

    Now, Nokia with WP8 is in quite a big step ahead of RIM with BB10.

    Nokia has low price point Asha phones and also high-end Lumia phones,

    so can RIM do the same?

    5) RIM will still need to use a lot of money in R&D and marketing in the future, while Nokia

    is saving money in R&D and marketing, because MS shares the expenses.

  • Report this Comment On January 04, 2013, at 3:37 AM, EmiliePortman wrote:

    Nokia stock will have a better upside in 2013 than Apple and Google. The reason is quite simple, the stock has been beaten down too hard and short sold heavily. A positive quarter or even breaking even in EPS will bring investors to think back how NOK cost a couple of years ago, how much NYSE tech stocks cost compared to their valuated values and so on.

    In other words, Nokia is extremely cheap right now. Nokia has used about $55 billion in R&D alone all these years, now its market cap is below $15 billion. That alone, Nokia is more than worth its price, if some company like Microsoft makes Nokia a buyout!

    At this price, NOK is extremely undervalued.

    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 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.

    Usually, NYSE tech stocks are at least 2X valuated value. In this case, NOK share price should be at least around $10.

    NOK is so cheap, 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%!

    Nokia is a good candidate for a big short squeeze!

    Important to note:

    Usually, NYSE tech stocks are at least 2X valuated value. In this case, NOK share price should be at least around $10.

  • Report this Comment On January 04, 2013, at 3:38 AM, EmiliePortman wrote:

    Lumia 920 and Lumia 620 are arriving India in January.

    Lumia 920 and Lumia 505 are also arriving Latin America.

  • Report this Comment On January 04, 2013, at 3:38 AM, EmiliePortman wrote:

    According to Global Statcounter data, from the 26th November to 25th December 2012,

    it is Nokia’s platforms which surprisingly saw the biggest growth.

    The fastest grower on the chart was Nokia’s S40 platform, as currently found on their Asha line, which grew from 13.94% at the start of the month to 15.5% at the end of the month, adding on average 0.029% per day, or close to 50% more than Android per day.

    Even Symbian grew, from 10.41% to 11%, or around 0.01% per day.

    If we add Nokia’s platforms (which are ALL growing) together, and add a fudge factor of Nokia owning 75% of the Windows Phone market, Nokia’s platforms grew from 25% to 27.2% of the market, or around 0.041% per day, or twice as fast as Android, which if it continues, would leave Nokia once again as the leading platform vendor in a year and a bit.

    The numbers add some further colour to a recent analysis, which suggested Android was losing out to even lower cost Nokia S40 handsets in developing markets, which presented a real challenge to the meteoric growth of Android, and also suggests Nokia will likely announce pretty good performance of their Asha line next month.

    Surprisingly over the last month Apple has been in major decline, dropping more than 0.056% per day, starting the month at 24.87 market share and ending it at 21.98.

  • Report this Comment On January 04, 2013, at 3:39 AM, EmiliePortman wrote:

    Nokia Lumia 620 Beats Samsung Galaxy S III In SunSpider And BrowserMark 2 Tests

    Lumia 620, the upcoming mid-range Windows Phone 8 device from Nokia performs better than Samsung Galaxy S III in two of the standard browser benchmarks. GSMArena posted the preview of the device and they compared the Sunspider and BrowserMark 2 benchmarks of Nokia Lumia 620 with other Lumia devices such as Lumia 920 and also Samsung Galaxy S III. Even though Lumia 620 will cost only half the price of Galaxy S III, it scored better in both the Sunspider and BrowserMark 2 benchmarks, which means even a very affordable phone

    Lumia 620 is a faster phone than Galaxy S III.

    http://www.wpdang.com/archives/60225.html

  • Report this Comment On January 04, 2013, at 3:39 AM, EmiliePortman wrote:

    Latest Kantar report shows global WP phone growth, strong Nokia comeback in the UK.

    BGR reports on KantarWorldPanel’s findings and concludes that Windows Phone is gaining traction in Southern Europe. As Nokia is finding it nigh on impossible to meet the demand for the 920, bringing down prices of the previous generation handsets has at least been able to attract a lot of first time buyers or those looking for budget friendly smartphones.

    Mexico is launching Lumia 505 and Lumia 920.

    Lumia 920 and 505 confirmed in Chile.

    iSuppli: Nokia can still beat Samsung and take the crown back.

  • Report this Comment On January 04, 2013, at 3:40 AM, EmiliePortman wrote:

    The biggest carriers in China are willing to push Nokia´s flagship phone, and for a good reason, because the 32 GB (+7 GB SkyDrive) Lumia 920 is a lot cheaper than iPhone 5 or Galaxy Note 2.

  • Report this Comment On January 04, 2013, at 3:40 AM, EmiliePortman wrote:

    Another deal from China has also been announced.

    360buy, China’s leading direct e-commerce company, announced that it has formed a strategic partnership with Nokia and signed a procurement agreement worth RMB 2 billion for 2013. As part of the cooperation, Nokia’s latest Lumia 920 handset has made its debut on 360buy, with the release of the Nokia 2050 soon to follow.

    Online shopping is growing significantly in China.

  • Report this Comment On January 04, 2013, at 3:41 AM, EmiliePortman wrote:

    Because now RIM still has negative EPS, and

    Nokia´s EPS in last quarter was -0.07 euro per share any more, and if Nokia´s EPS breaks even this quarter or becomes positive, then the markets will no doubt choose Nokia as the certain third horse in the race. That will show a huge surge in the stock price, because for example short sellers will have to buy back.

    The reasons are quite simple, because when RIM still need to use money to launch BB10, it means WP8 is already making money.

    And during 1Q13 when RIM gets BB10 phones out, Nokia will have already a lot more to come at MWC. Additionally, that “a lot of interesting things with Virizon” that Stephen Elop mentioned, will already take place step by step.

    The conclusion is, Nokia and WP8 are in a significantly bigger step ahead of RIM and BB10.

    Nokia is speeding up the clock.

    According to Nokia´s factory in Beijing, which is the biggest factory of Nokia, is producing 600 000 Lumia 920s a month. It also produces other Lumia phones, therefore the number is 2 million Lumia phones a month.

    Then, the other 6 Nokia factories have capacity about 1/4 of the Beijing factory each. In addition, Taiwanese Compal is still producing older Lumia phones at the same time!

    According to DigiTimes, Nokia will also launch tablet at MWC next year.

    Nokia is also planning a lot of interesting things with Verizon, according to CEO Stephen Elop.

    Nokia now has low end competitive Asha phones and high end competitive Lumia phones. Apart from that, Nokia has other business units like Navteq, NSN and intellectual property rights.

  • Report this Comment On January 04, 2013, at 3:41 AM, EmiliePortman wrote:

    Nokia, which has come down more than 90% from its highest, is really worth consideration.

    Feature phones Asha 205 and Asha 206 belong to Nokia´s “next billion people to reach internet” strategy. This is a big chance. There are still many many people out there using feature phones, especially in developing countries.

    In these phones, there are Facebook, Twitter etc, and also 40 most popular games in the world for free. All packed in a $60 phone without any contract. Therefore, I think it is quite hard for other manufacturers to compete featurephones with Nokia.

    And the featurephone division in Nokia has been profitable, because of this Asha family. Therefore, Nokia´s 3.6 billion euros net cash, plus NSN, Navteq, patent portfolio and featurephones (all these 4 divisions have been profitable) are giving enough time for Lumia phones to take off (pushing them with huge marketings, discounts and campaigns). And Nokia´s EPS was -0.07 euro any more last quarter, when Lumias were sold 2.9 million units. And now, even Street estimation is above 5 million units. Kantar just reported WP phones have reached 11.7% in Italy. The WP phones most sold there are Lumia 610 and Lumia 800.

    Yahoo-China reported a few weeks ago that Lumia 920 alone was ordered from Nokia up to that date 2.5 million units. And Lumia 920 still sells out in most of the countries launched. Lumia 920 and 820 also support Arabic now, which meas WP8 phones will arrive to more markets.

    In addition, China Mobile (the world´s biggest carrier with about 700 million subscribers) is selling Lumia 920T soon, starting December!

    Lumia 920 has repeatedly sold out in many countries, such as: Italy, Germany, Australia, US, UAE and so on. A few days ago, this also happened in France, Sweden, England etc.

  • Report this Comment On January 04, 2013, at 3:42 AM, EmiliePortman wrote:

    Conclusion is, Nokia is to buy and hold it for long term or medium term

    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.

    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 raised price target.

    Also UBS and Jyske Bank 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!

  • Report this Comment On January 04, 2013, at 3:44 AM, EmiliePortman wrote:

    Nokia Siemens Networks (NSN) has won two different network orders in quick succession from telecom giant China Mobile Ltd (CHL) and Telefonica S.A. (TEF). This successive order wining reflects the company’s ability to serve diverse network needs of different customers.

    Under the agreement, NSN will deploy China Mobile’s Serve atOnce Intelligence customer and business network analysis tool in the Guangdong region of China. The new analysis tool will provide information regarding customer usage and preference. It is also expected to allow the largest telecom carrier in the world to increase customer loyalty and add new revenue streams.

    In another agreement, NSN will upgrade the existing GSM and 3G network of O2 (Telefonica UK) with radio access network technology to provide LTE (Long Term Evolution) services across London and south east of England. The contract includes installation of NSN’s NetAct network management system that will allow consolidated configuration, monitoring and network optimization across the network.

    In the last two months, the company has won two network contracts from China Mobile and South Africa’s Vodacom.

  • Report this Comment On January 04, 2013, at 3:45 AM, EmiliePortman wrote:

    Nokia 2050, the phone which is exclusive for China online retailer 360buy was officially launched today in China. The phone costs only 399 yuan.

    http://winp.cn/portalthread-121314-1-1.html

    Read the features and specs!

    I think iOS, BB10 and even Android are not able to compete with this price point.

  • Report this Comment On January 04, 2013, at 3:46 AM, EmiliePortman wrote:

    Bloomberg’s Adam Ewing wrote that Nokia (NOK) may have an advantage over Apple in Europe because the “Lumia” line of phones running Microsoft‘s (MSFT) Windows Phone 8 operating system works on two dozen different 4G networks using “long term evolution,” or LTE speeds, while the iPhone 5 only works on two networks. Ewing quoted some shoppers who said they went with a Nokia because LTE was a must in their smartphone purchase.

    Strategy Analytics analyst Neil Mawston, who thinks Nokia will sell 5 million Lumia devices this quarter, said, “There is clearly strong demand among European consumers for 4G phones.”

  • Report this Comment On January 04, 2013, at 3:46 AM, EmiliePortman 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.

  • Report this Comment On January 04, 2013, at 3:48 AM, EmiliePortman wrote:

    One way or another, this quarter is no doubt going be a lot better than last quarter in smartphones.

    All Lumias were sold only 2.9 million units last quarter.

    Yahoo-China reported last week that Lumia 920 alone was ordered from Nokia up to date 2.5 million units. And Lumia 920 still sells out

    in most of the countries launched. Lumia 920 and 820 also support Arabic now, which meas WP8 phones will arrive to more markets.

    In addition, China Mobile (the world´s biggest carrier with about 660 million subscribers) is selling Lumia 920T soon, starting December!

    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.

    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.

  • Report this Comment On January 04, 2013, at 3:49 AM, EmiliePortman wrote:

    Nokia does not only make phones.

    Nokia´s feature-phone division is doing well, because of Asha phones.

    Nokia has not lost about 1 billion dollars a quarter like the media says, because Nokia has 5 business parts and 4 of them are profitable. Therefore, the exact number is much much smaller.

    Nokia´s loss is only 17 million euros any more (compared to Reuters´s consensus 277 million and Nokia´s last two previous quarters about 290 million each), this was much better.

    Nokia Siemens Networks is doing very strongly (over 300 million euros profit in 3Q. More business to come in the future: 3G in developing countries, 4G in developed and emerging countries)

    NAVTEQ was also profitable, NAVTEQ´s number might be better in 4Q, because of the deals with Amazon, Yahoo, Oracle and many car-companies.

    Nokia´s patent portfolio earns about 500 million euros a year, and the number is still increasing.

    Nokia has cut expenses (which saves about 1 billion euros a year) and in the future Nokia does not have to spend so much in R&D either, because it has teamed up with Microsoft.

    Nokia´s WP 8 devices will hit more markets, for example the Middle-East countries (Lumia phones have not been in these countries yet till now).

    New Lumia generation looks promising.

    For example Lumia 920 has features, such as:

    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 offline

    Augmented reality City Lens

    Free music with no advertisements

    NFC

    Lumia 920 does not only have a great low-light camera, but also has exceptional audio recording quality due to the 3 HAAC Rich-recording microphones.

    Right now, there is no way to compare Nokia to Apple among most smart phone consumers, but there is hope in the future.

    For example, Nokia just signed the contract with China Mobile (who has about 660 million subscribers, which is about 70% of all subscribers in this world´s biggest nation), and even though iPhone is very popular in the US and Europe, Windows Phone OS already surpasses iOS in the world´s biggest countries beside China, such as Brasil, India and Russia. Even though in these countries more low price point phones are sold, but these are the most important emerging giants in the world where Nokia´s position and brand are still quite strong. And it may be sooner than we think when more people in these countries are able to afford high end smart phones.

    Nokia has not lost about 1 billion dollars a quarter as the media says, because its other parts of business are profitable (while 1Q´s and 2Q´s total loss 290 million each, 3Q´s total loss only 17 million euros any more). Therefore, 3.6 billion euros net cash should be enough for Nokia´s transition period before WP8 phones take off. There is still enough room for a third ecosystem in this world, beside emerging markets Europe has adopted WP phones in a very encouraging way (for example Italy has already over 10% market share for WP phones, considering the Lumia debut has not been a year yet, since last November only. WP OS has already grown a lot faster compared to iOS and Android in their first quarters). Lumias were sold 9,9 million units under a year. The number is small compared to Iphones and Androids sold today, but it is not a bad start. It is more fair to compare the numbers among the 3 in their first year.

    Now when the DOWS and S&P have almost hit all time highs, investors start to think more about cheap and potential value stocks. Usually NYSE stocks are on an average about 2x book value, NOK is now a lot below this (Apple about 5x book value). Therefore, I think NOK is cheap enough for its values. Another reason is NOK has been already shorted massively about 19% of its total shares.

    Apart from Vertu and so on, Nokia still can sell its patents, since it still has about 30 000 patents in its own hands (in case Nokia needs more cash).

    If the stock price still goes cheaper and cheaper, one day some rival would bid for Nokia, just for its patents ( Motorola was acquired by Google with 12 billion dollars, this is good to remind people who underestimate intellectual properties´ value).

    Microsoft will bid for Nokia with higher premium if some company really bids for Nokia, because Nokia is in so close partnership with Microsoft that this also includes business strategies, business secrets and so on. Therefore, Microsoft won´t let any company acquire Nokia than itself. When it comes to Microsoft, it is still the net cash king in the world, after all its debts excluded, it still has a huge net cash about 50 billion dollars.

    About Nokia´s buy out: Motorola´s patents were worth about 5.5 billion, if some company bids for Nokia´s patents and Microsoft still does not acquire Nokia, Nokia will be sold in parts. Nokia has 5 business parts, therefore patent portfolio is only 1 out of 5. Now, you can count yourself how much are Nokia Siemens Networks, NAVTEQ, and feature-phone division worth.

    I know US is very important market, because Wall Street and US consumer trend give directions to market momentum around the world, still you can not neglect the power of BRIC and MIST these days.

    You can calculate yourself how many people living in these 8 BRIC- and MIST-countries. In these countries, in Brazil, Russia, India, China, Mexico, Indonesia and Turkey, Nokia´s position and brand are still quite strong (except South-Korea, but you know it is Samsung´s home-country and the smallest country among those important 8 anyway).

    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.

    Nokia also announced it is hiring more employees to work in Chicago (where NAVTEQ is). Who says Nokia is going bankrupt? Think twice before saying that!

    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 Eastman-Kodak, I think it is almost the opposite.

    Eastman-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) during traveling.

    One of the reasons why Nokia is one of the most defensive stocks right now during bear markets is that Nokia has been already shorted massively about 19% of its total shares (while Apple only about 0.5%, Samsung over 2%, and other telecom companies about 4% in general).

    By the way, NAVTEQ just reported it is making navigators into 4 out of 5 cars (80%).

    And I hope Nokia will license City Lens to tablet makers like Amazon, Asus, Acer etc (at the same time it can turn Google maps users into using Nokia´s advanced mapping platform) soon.

    When also Nokia´s Devices & Services division is profitable as well, will you ever have a chance to buy NOK stock this cheap again? The answer might be: NEVER.

    Another aspect is, when now NOK has been already shorted massively about 19% of its total shares, bears could not go any further, because the share number that is available for borrowing/renting has already hit record high.

    If bears still dare to sell, there are plenty of happy buyers out there, for example Switzerland´s central bank has announced it had bought more NOK shares and has become the 5th biggest shareholder in Nokia.

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

    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 HQ and other non-core assets.

    Nokia is a big chance and good bargain at over 4 dollars, because Nokia Siemens Networks has grown so strongly and profitable that Nokia and Siemens have decided to make it independent in these couple of years. That means Nokia shareholders will have two companies´ shares in their hands.This is a bonus.

    The conclusion is Nokia is for long-term and medium-term investing not for short term. Just think about this, even when Apple and Google reach 1000 dollars, that is not even doubling, but in the long term Nokia has the opportunity to triple or even more.

  • Report this Comment On January 04, 2013, at 3:50 AM, EmiliePortman wrote:

    Windows Phone Kid’s Corner Won Pogie Awards For the Brightest Ideas Of 2012.

  • Report this Comment On January 04, 2013, at 3:54 AM, EmiliePortman wrote:

    The Independent UK calls the Lumia 920 "probably the most advanced smartphone on the market"!

    Awards Won By Nokia Lumia 920

    The Top Smartphone of 2012, V3, UK

    The Best Mobile Phone of 2012, Readers Choice Award, Gizmodo, Australia.

    iF Award for Outstanding Design, International Forum Design, Germany

    Mobil Award for Best Smartphone Design, Mobile Magazine, Denmark

    Best Smartphones of 2012, The Next Web, USA

    Top Score Award, Mobil, Sweden

    The Best High End Smartphones for the Holidays, CNET, USA

    Best Productivity Phone, Best Camera Phone, Best Mapping Phone, Best Windows Phone, Runner up, Arstechnic, USA

    Top 25 Tech of 2012, Mashable, USA

    Top Smartphone of the Year, Mybroadband, South Africa

    Best AT&T Smartphones of 2012, BGR, USA

  • Report this Comment On January 04, 2013, at 3:58 AM, EmiliePortman wrote:

    In the case of Nokia, there are 3 important winning factors in China in Nokia phones compared to Samsung:

    1. endless free music with no ads

    2. offline GPS.

    3. augmented reality City Lens with location information

    In developing and emerging countries where carriers don´t offer contracts starting from free yet, customers will choose the Lumia 620. That phone is affordable and it has almost all the Nokia exclusive features. This phone will be already available in many countries starting January.

    Additionally, Lumia 920 is also heading to India and Latin America, where Nokia brand is still quite strong, and those are also ones of the biggest countries in the world!

    Nokia is also planning a lot of interesting things with Verizon!

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