Alcatel-Lucent: A Tech Rally That's Fraught With Risk

With shares of Alcatel-Lucent (UNKNOWN: ALU.DL  ) having shot up more than 60% in the past several months based on some recent positives for the company, including a $2.1 billion line of financing secured from Goldman Sachs and Credit Suisse, investors are wondering if this rally will last long and prove sustainable. In this video, however, Motley Fool tech and telecom analyst Andrew Tonner tells us his view on why Alcatel-Lucent faces a lot more negatives than positives in the long run and why being part of this rally as an investor could be risky.

One company that Andrew mentions that's facing similar headwinds but taking a different approach 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.

Read/Post Comments (4) | Recommend This Article (2)

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  • Report this Comment On February 13, 2013, at 3:35 AM, SirOvidius wrote:

    Andrew Tonner made ALU - bashing to his main obsession... Obv. shorting a turn arround story.

    That´s a compliment for the company and unfortunately THUMB DOWN for MOTHELY FOOL!!

  • Report this Comment On February 14, 2013, at 7:53 AM, bestwaytoriches wrote:

    ALU just mentioned Europe is not stable.

    ALU is a cramer pump that's a complete clue stay away. So for the same price and much more stable Co and setting a new trend of profits. RAD $1.58 with real accounting and major up grades.

  • Report this Comment On February 14, 2013, at 7:55 AM, grendeth wrote:

    I tend to agree, ALU has ahigher risked and we all have to accept it. Fundamentally, ALU has too many employees for a company that size/sales compared to their competitors.

    They just need to be more competitive.

  • Report this Comment On February 14, 2013, at 11:18 AM, Robertlhayes wrote:

    You can read the alu feb 7 call transcript on seeking alpha.Its a little short of what was said at the call.I think alu left out what they considered personal remarks.alu said 500 million impairment in 2012 and another 500 million in 2013.SGA would be down 12%,They have renagotiated half there unprofitable service contracts.the 500 million impairment for 2013 means more downsizing thus layoffs.It was the up side of the call I liked,Alu came thru with the billion pluss cost savings they said they would get back in 2012.the underwater sub unit with 30,000 Kelometers backlog.This unit acounts for almost 40 % of total revenues and alu did suggest that this unit is realy picking up and to expect more good news in 2013.the 88% increase in 100g and 28ng high end products(the light radio network) and alu's belief that it will continue to grow at about this rate for 2 to 3 years.Also I like the alu story on there new high end routing product the 1830.Independent research has alu for ports shipped at 29% of market.I am long alu stock 1.01 with march and june call spreads and looking for a entry to go long 1.00, 1.50, 2.00 2014 leap call butterflies.One good stock can make a great year in the stock market and I am really going to take the risk here on alu Andrew.

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