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Another Red Flag for Alcatel-Lucent Investors

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February 7, 2013 | Comments (2)

Shares of French telecom conglomerate Alcatel-Lucent (NYSE: ALU  ) fell hard today on news that CEO Ben Verwaayen will be stepping down. The stock had experienced a recent run after receiving a new $2.1B line of credit from Goldman Sachs and Credit Suisse. In this video, Motley Fool tech and telecom analyst Andrew Tonner tells investors why the company's recent surge isn't in line with the headwinds it's facing. He outlines some of the biggest trends in the industry that are driving down ALU's profitability, and says that, while the company has recently initiated an aggressive cost-cutting program, this alone would only slow the company's fall, rather than turn it around.

Another company facing some of the same headwinds as Alcatel-Lucent, as it looks to reinvent itself, is Nokia. Nokia's been struggling in a world of Apple and Android smartphone dominance. However, the company has banked its future on its 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.

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Andrew Tonner has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 08, 2013, at 2:55 PM, bestwaytoriches wrote:

    Andrew,

    I have mentioned when crammer and the Motly Fool put out buy article for weeks 2 or 3 daily something smells.

  • Report this Comment On February 08, 2013, at 8:22 PM, Robertlhayes wrote:

    Um,best way to riches.1.Motley with a e.2 cramer with one m and andrews article here is not saying buy alu,red flags is not a buy sign andrew is yet again saying he is decidedly against buying alu as is almost all of the columnists at this site. Hi,Andrew sounds like you did not go to the quarterly on feb 7 either.I think you and Dan Radovsky both sleep in.I got up early and went.You really should hear or read the quarterly before you write about alu or maybe omg no you did read it.I thought jp morgan was the most impressed analyst there.I know Andrew I know it was Morgan Stanley that came out with the overweight upgrade today but they started off first on the Q/A part of the call.Morgan Stanley was impressed sure all the analyst were I noticed it.lets give jpm and the rest some time here.Alu lost on the quarterly but what a great story on almost every thing else wow!One more thing.I know Morgan Stanley said 2 euro price target today but I said it two months ago.Andrew stay away from doing a story on alu at the next quarterly its going to be real good even with a impairment charge and Andrew You look bad enough as it is!!! long alu at 1.01 and loving it.

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5/21/2013 4:01 PM
ALU $1.51 Down -0.05 -3.21%
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