A shell-shocked economy, spiraling debt at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic is never beneficial to investors, it's still a good idea to play devil's advocate with investments from time to time.
Consider cell-phone king Nokia (NYSE: NOK ) . The company has delivered some amazing growth in the past, but in Motley Fool CAPS, a significant number of the 2,555 members weighing in on the Finnish company are giving reasons to be bearish today. I've already plucked out some of the common bullish rationale backing Nokia, so here are three counterpoints, courtesy of CAPS:
Stiffer competition: Nokia may still be the leader, but investors argue that competition from Research In Motion (Nasdaq: RIMM ) and Apple (Nasdaq: AAPL ) laid on traditional phone giants like Nokia and Motorola (NYSE: MOT ) is stronger than ever before, seriously eating into Nokia's market share and putting its leadership at risk.
Heavy cuts: Nokia recently said it's cutting its sales forecast, reducing its dividend, and following wireless brethren Sprint Nextel (NYSE: S ) and AT&T (NYSE: T ) by cutting its workforce. Nokia may not be in the dire circumstances that others are in, but some investors are concerned that the giant is going on the defensive precisely when it should be pouncing on weakened competitors.
Profitability pressure: Similar to Qualcomm (Nasdaq: QCOM ) , Nokia has felt the pain of the economy on its bottom line. Earlier this year, it reported worse-than-expected fourth-quarter profits, experiencing rapid deterioration in its markets, and gave a sobering view of 2009. Considering the macro pressures facing the mobile market -- and the dominant slice that Nokia holds -- many investors are opting for the sidelines and waiting for a brighter day to buy Nokia stock.
Of course, Nokia has survived and thrived in the past despite dozens of obstacles. But the question about whether now is the best time to buy a proven leader is why CAPS is such a great resource to augment your own analysis.