Alcatel-Lucent does have a positive net cash position, but when you dig into the numbers and make some reasonable projections, it doesn't appear that the company has a very long lease on life. It's burning through cash (about $630 million worth in the most previous quarter) and just recently announced a massive restructuring effort that will look to cut more than $1.5 billion in costs and ax about 5,000 employees. Things certainly look bleek for the purveyor of telecom equipment, and just recently the company received even more bad news in the form of a $0 price target from a Wall Street analyst. In the following video, Brenton describes the Alcatel situation in more detail and cautions investors to resist any speculative turnaround bets.
While Alcatel's bad press may be merited, there are definitely instances where negativity can breed opportunity. With so many of the big finance firms getting bad press these days, you may be inclined to stay away from the sector entirely, but that could be a huge mistake. In fact, some of the best opportunities over the next few years can be found there, including one small, under-the-radar bank. It’s been called one of The Stocks Only the Smartest Investors Are Buying. You can learn about it, and more, in our exclusive free report. Just click here to keep reading.
Brenton Flynn has no positions in the stocks mentioned above. The Motley Fool owns shares of France Telecom. Motley Fool newsletter services recommend France Telecom. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.