Guest misterstockwell Posted February 22, 2011 Share Posted February 22, 2011 Value with a catalyst. In this case, a remaking of the company, new management, new strategy, backstopped by $2/share in net cash, huge cash flows, low multiples, and they are still #1 in the world. I think their new combo with MSFT will work. NOK knows hardware well--they make great phones. Symbian was a poor operating system. Windows Phone 7 has gotten great reviews, and will only improve with Nokia input like their worldwide mapping. If nothing else, there is a very large margin of safety here. Link to comment Share on other sites More sharing options...
zarley Posted February 22, 2011 Share Posted February 22, 2011 Value with a catalyst. In this case, a remaking of the company, new management, new strategy, backstopped by $2/share in net cash, huge cash flows, low multiples, and they are still #1 in the world. I think their new combo with MSFT will work. NOK knows hardware well--they make great phones. Symbian was a poor operating system. Windows Phone 7 has gotten great reviews, and will only improve with Nokia input like their worldwide mapping. If nothing else, there is a very large margin of safety here. Been thinking about NOK and MSFT since the week of their announcement. I agree that the two companies make good/complementary partners. Nokia's hardware expertise and global manufacturing reach combined with MSFT's software strength. I've heard very good things about WP7 and it would seem that exchange integration and native office support would be big advantages in the business market. Both would seem to have a consumer/retail problem in the American smartphone market, but they are probably better off together than they are apart. The timing is tough though. I think they'll be lucky to get a new product to market this year, and they better do it right because a lot of people are skeptical of combination. Being an underdog is an odd position for two tech giants to find themselves in, but that's where they are and they need to execute. I'm also giving NOK strong consideration right now because the reaction to the MSFT announcement seems way overdone and the valuation looks really attractive. I think the market is pricing this as a failure before they even get a chance to show what they can do. Link to comment Share on other sites More sharing options...
brker_guy Posted February 22, 2011 Share Posted February 22, 2011 Mr. Buffett always talk about the "Competive Moat" in a competitive industry. No industry is more competitive than the wireless space. Pricing decline in the telco space runs a very fast rate. Anyway, if you are interested in NOK, this is a must read article for you to think about the "Competitive Moat": http://www.hs.fi/english/article/Knock+Knock+Nokias+Heavy+Fall/1135260596609 Link to comment Share on other sites More sharing options...
ubuy2wron Posted February 22, 2011 Share Posted February 22, 2011 I recenly purchased this name and added more on recent sell off. I believe Mr. Mkt is valuing the handset business which is only part of NOK at less than zero. The handset biz is a pretty short cycle biz ,what was a hot item this year is stale within 18 months, phones are more like fashion items and should be thought as such. MOT once had the Star tec phone and NOK had no clamshell offering MR Mkt. decided in its wisdom that NOK had lost its touch and marked down NOK smartly. Nok and RIMM have similar mkt caps right now and I suspect that 100 billion of AAPL's mkt cap can be attributed to I phone revenues. I very much like the memo that the new NOK CEO sent to employees. Snr mgmt is not asleep at the switch. You -we are prolly early but then value guys pretty much ALWAYS are. Link to comment Share on other sites More sharing options...
gokou3 Posted February 23, 2011 Share Posted February 23, 2011 Interested in NOK too. The Jan2013 $5 call is priced close to zero time value. LEAP pricing for high-yielding stocks is interesting. Link to comment Share on other sites More sharing options...
zarley Posted February 23, 2011 Share Posted February 23, 2011 Mr. Buffett always talk about the "Competive Moat" in a competitive industry. No industry is more competitive than the wireless space. Pricing decline in the telco space runs a very fast rate. Anyway, if you are interested in NOK, this is a must read article for you to think about the "Competitive Moat": http://www.hs.fi/english/article/Knock+Knock+Nokias+Heavy+Fall/1135260596609 Awesome brker_guy. Thanks for the link. Nokia really is a great example of how market leaders can get lost in the woods with their own products. The key difference at Apple is, I think, that they view themselves as a consumer electronics company rather than a computer or technology company. The end-goal for Apple is focused very much on the user experience more than on the technology its self. That's what Nokia lost (at least at the high end) and what Microsoft often struggles with -- a compelling consumer experience that just blows people away. The positive thing for Nokia is that despite its own flaws and the time they lost on smart phones, they're still the top phone maker in the world. And, there is a lot of improvement that can be made organizationally, that should improve overall effectiveness. Elop's shock (as expressed in the burning platform memo: http://www.engadget.com/2011/02/08/nokia-ceo-stephen-elop-rallies-troops-in-brutally-honest-burnin/) is the same as every other outsider -- how can Nokia not have a reasonable competitor to iphone after three years? Link to comment Share on other sites More sharing options...
Viking Posted February 23, 2011 Share Posted February 23, 2011 I have also been reading up on NOK. Looks to me to be a roll of the dice type of situation for NOK; if I do anything it will be with a small position. I wonder if MSFT is not a better way to play this as they look to be getting a massive win (and the stock sold off???). I already hold a big position in RIMM; they (and other NOK competitors) look to be getting a near term gift as this has to hurt NOK sales in the short term. Here are a couple more articles I liked: - http://mobileopportunity.blogspot.com/2011/02/impact-of-nokia-microsoft-alliance.html - http://communities-dominate.blogs.com/brands/2011/02/noki-soft-windfall-who-wins-most-when-micro-kia-hand-away-lucrative-smartphone-empire-bigger-than-bl.html Link to comment Share on other sites More sharing options...
txlaw Posted February 23, 2011 Share Posted February 23, 2011 NOK reminds me of DELL before the turnaround/transformation (although some would say DELL isn't yet out of the woods). Declining market share, declining margins, no pricing power, inefficient operations. You might want to hold off on putting money into NOK until there's more information out there on whether their new strategy will be successful. I'm not so sure the Microsoft deal was the right way to go. In fact, MSFT seems to have gotten the better end of the deal on that one. Link to comment Share on other sites More sharing options...
Guest misterstockwell Posted February 23, 2011 Share Posted February 23, 2011 Mr. Buffett always talk about the "Competive Moat" in a competitive industry. No industry is more competitive than the wireless space. Pricing decline in the telco space runs a very fast rate. Anyway, if you are interested in NOK, this is a must read article for you to think about the "Competitive Moat": http://www.hs.fi/english/article/Knock+Knock+Nokias+Heavy+Fall/1135260596609 That is a perfect setup for Elop to come into. Jorma Ollila was a fool. I saw far too much of him in the days of the QCOM/NOK battles. We owned a huge QCOM position, so every move was important to follow. Ollila's handling of that situation was pitiful. He was arrogant, and CDMA was never going to amount to anything. He refused to use QCOM chipsets. He missed an enormous market. Elop is no fool. He sees what needs to be done. He gets it! That's the key. It's also important that they aren't beginning this struggle from a position of weakness. They have cash, and cash flow. Link to comment Share on other sites More sharing options...
bargainman Posted February 23, 2011 Share Posted February 23, 2011 Elop wrote a shocking memo, but how is he operationally, does anyone know? He can't seem to stay at a job longer than a few years. He was CEO of Macromedia, sold to Adobe, stayed a while, left when he wasn't going to be CEO. Went to Juniper I think. Then to MSFT, now to NOK. Does anyone know enough about his operational skills to make a call here? Change is hard. Are people in NOK ready for it? This reminds me of Sam and IBM (elephants can dance). I didn't read his book but did read some interviews and he said that the one thing that made it all possible was that people at IBM did know there was a problem, and bought into the fact that they needed to change. NOK is still #1 and they haven't got an iphone competitor after 3 years.. where are they? Link to comment Share on other sites More sharing options...
Myth465 Posted February 23, 2011 Share Posted February 23, 2011 Interested in NOK too. The Jan2013 $5 call is priced close to zero time value. LEAP pricing for high-yielding stocks is interesting. This is very true. I swapped FTR for leaps due to this and now look for high yield securities for Leap positions. A small move can make a big difference (up or down). Link to comment Share on other sites More sharing options...
Guest Bronco Posted February 23, 2011 Share Posted February 23, 2011 I also look at some leaps, but just picking. CSCO $20 2013 for one. Nokia isn't really a cheap stock per se, it is more a turnaround play. If you believe in the Softy Nokia marriage and it hits, you will do well with NOK. NOK is obviously more leveraged to NOK's success but I think MSFT offers better risk/reward here. I am going to start picking at Apple again...people have their favorite cell phones and devices here and that's great, but Apple is the cash cow with 60b in the bank. If they essenitally do nothing different in 2 years they will have $100B in cash. Nice "problem". Link to comment Share on other sites More sharing options...
BargainValueHunter Posted February 23, 2011 Share Posted February 23, 2011 I wish managements would consider the competitive marketplace in a sector without obsessing over the market leader. This seems to be particularly important in the mobile space. I believe that is how Microsoft became caught in its "perpetual vortex of keeping up with the (tech) Joneses". First it was IBM, then Apple (in the late 1980s - pre-Web 90s) in the creative and educational markets. Then came Netscape and during the mid to late 90s Microsoft went nuts buying and trying to catch every little Internet wave. And let's not forget Oracle. Now Google and "Social Networking" companies are holding the carrot in front of Ballmer's face! (Yes, I know, Microsoft owns 5% of Facebook) Thank God for Microsoft longs that Office continues to be a mega-cash cow. Why not innovate in your proven space (software for the enterprise and the PC)? Protect Office by expanding its moat and leave MP3 players, video game systems, search engines and phones to the leaders in those markets. What does this have to do with Nokia? Well I feel that Nokia is the new Microsoft. You are looking at dead money, imo, until Nokia can somehow fill its board and front office with people who are clearly Steve Jobs 2.0. Link to comment Share on other sites More sharing options...
Guest misterstockwell Posted February 23, 2011 Share Posted February 23, 2011 Nokia isn't really a cheap stock per se, it is more a turnaround play. Not cheap? ~10X EPS(8X backing out cash), $2/share cash, large dividend Link to comment Share on other sites More sharing options...
Guest Bronco Posted February 23, 2011 Share Posted February 23, 2011 Help me out - market cap 32B? So you can guarantee they will make $3.2B in FY11? I only did a quick look but tell me if the market cap looks right since you think they are cheap. Link to comment Share on other sites More sharing options...
brker_guy Posted February 23, 2011 Share Posted February 23, 2011 Well I feel that Nokia is the new Microsoft. You are looking at dead money, imo, until Nokia can somehow fill its board and front office with people who are clearly Steve Jobs 2.0. Well said, BargainValueHunter. Back in the 1996 when I was a NOK shareholder, Nokia dumped its other businesses like tires and TVs(Yes, Nokia did make TVs and tires) to hop on the digital cell phone wagon at the expense of Motorola. If you read that article that I posted earlier, you will see some of the former employees' opinion on the company's success during that time (1996 to 2003). During that time, Nokia could do no wrong. Everyone in the cell phone universe was gunning for the Nokia 9000(the first smart phone on the market) and the Nokia 8800. After these two successes, Nokia lost its vision and focus. In the wireless world, if you lose focus for a second, you will be toast. So, what Nokia needs more than anything is the Steve Jobs 2.0 to bring that next hot product onto the market be it smart phone or "killer app", but hiring a C-Level job shopper won't cut it... Mr. Elop is no Steve Jobs! Link to comment Share on other sites More sharing options...
Guest misterstockwell Posted February 23, 2011 Share Posted February 23, 2011 Help me out - market cap 32B? So you can guarantee they will make $3.2B in FY11? I only did a quick look but tell me if the market cap looks right since you think they are cheap. ...and revenues of ??? Link to comment Share on other sites More sharing options...
S2S Posted June 2, 2011 Share Posted June 2, 2011 Bloomberg BusinessWeek just published a very detailed piece on the ongoing struggle at Nokia and background on Stephen Elop's decision to abandon its proprietary MeeGo platform. http://www.businessweek.com/magazine/content/11_24/b4232056703101.htm I reckon there's already an overload of possible value plays in the LC Tech space ;D, but the article is worth a read for anyone interested in NOK, MSFT, or just the mobile phone war in general. Link to comment Share on other sites More sharing options...
Myth465 Posted June 3, 2011 Share Posted June 3, 2011 Interesting read, I am routing for Nokia though not with cash or options. I had a Symbian phone in 2004 or 2005, and prefer Windows OS. Hopefully it works out. Link to comment Share on other sites More sharing options...
tengen Posted July 6, 2011 Share Posted July 6, 2011 An article was published in Helsingen Sanomat about Nokia paying a group of key engineers $200 million to stay with the company back in the late 90's. Unfortunately it's in Finnish but Giga gives a bit of a summary: http://gigaom.com/mobile/nokia%E2%80%99s-200m-secret-shows-the-rot-goes-way-way-back/ Link to comment Share on other sites More sharing options...
MCN Posted August 5, 2011 Share Posted August 5, 2011 Nokia's price has dropped significantly over the last few months. Is anyone here taking another look at this yet? Link to comment Share on other sites More sharing options...
Guest misterstockwell Posted August 5, 2011 Share Posted August 5, 2011 Nokia's price has dropped significantly over the last few months. Is anyone here taking another look at this yet? Absolutely. I think this is one of those rare opportunities. I am in no hurry to buy as there is another quarter to slog through, but the more I look into it, the more I like it. Link to comment Share on other sites More sharing options...
Guest misterstockwell Posted August 15, 2011 Share Posted August 15, 2011 Google's acquisition of MMI makes a NOK acquisition by MSFT inevitable. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted August 15, 2011 Share Posted August 15, 2011 Google's acquisition of MMI makes a NOK acquisition by MSFT inevitable. The market and I agree with your assessment. ;) I believe smartphones in 2011 = PCs in 1985 Link to comment Share on other sites More sharing options...
Guest misterstockwell Posted December 8, 2011 Share Posted December 8, 2011 Made some purchases today at 5. Elop really does get it, and the new phones are very good. Exceptional phones on the way. If anyone is interested, much more information out there that is positive. Link to comment Share on other sites More sharing options...
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