Oh I get it now! He's just like one of those "aspiring actresses" that I dated once back in the day. You constantly have to hold yourself up as a mirror so they can always check the way they look and feel. ;-)
"I think it will trade at a slightly higher premium to NOK" should be I think it will trade at a slightly higher premium to ERIC
In Nokia's case, I don't think that backward-looking earnings will matter as much as the forward-looking restructuring milestones they lay out. As I have pointed out several times before, they should go for a kitchen sink quarter so they can lower expectations going forward. Hey, they can always reverse those restructuring charges in the restructuring kitty back if they actually come in lighter than expected.
Nokia has more net cash, a better balance sheet and better dividend coverage than Ericsson so I think it will trade at a slightly higher premium to NOK especially now that the revenue gap between the two is very narrow. Ericsson is barely generating enough free cash flow to cover their dividend!
Winning that Sprint management contract alone away from Ericsson -- $5B over 6 years from 2010-2016 for ERIC -- would force ERIC to cut their dividends. And there's a very good chance that Sprint has no choice but to single-source in order to cut their capex and opex to the very bone. Right now, BABA is cratering again which puts pressure on Softbank ($90+B in junk debt), which in turn puts more pressure on Sprint ($30+B in junk debt).
He's a waste of time, Bonzo. He doesn't even understand why demand and supply are curvilinear instead of just linear, much less understand what price equilibrium means in the real world. Much like the rising tide geniuses of the dotcom era, he wants to buy something that has come down in price regardless of the stage of the business/credit/financial cycle on the belief that it will come back to "historical valuations."
2 bear markets and a growling correction in the last 15 years and he is still talking about "historical valuations"! LOL!
Playing the dead cat bounce of broken down stocks is one thing, but then confusing that with an undisciplined buy and hold perspective complete with the use of all kinds of poorly understood metrics are the ingredients for investing disaster ... and in Fartman's case, too much drama.
Just look at LNKD and DATA today. Both down more than 40%. Wall Street had high expectations for Nokia's IPR licensing but Nokia failed to meet those expectations thus Nokia is being punished. If Nokia misses EPS or guides down for 2016 you can expect it to be punished even harder similar to what is happening to LNKD and DATA today. It is not worth the risk to hold on and find out. Nokia could easily go to low $4s after EPS report next week if it is bad news.
Sentiment: Strong Sell
I don't believe the stock will go much lower, however, to go up will take a significant amount of time as reorganizing will impede the merger to the next few months.
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real chickenlittle says "... I think we have 5% downside and hopefully earnings are decent and we get back to $7 ..."
IMO, it will all depend on how Suri presents NOK's upcoming restructuring measures. Since the patent hype is gone for a while (might come back though with LG, Apple, and other litigation), Suri will have to demonstrate NOK's capability to generate solid earnings from operations, say starting 2017. Otherwise, NOK's Forward P/E will be coming closer to that of ERIC. I sure believe the combined NOK-ALU will grow its operational margin, but I also believe that revenues will come down significantly.
To get enough reward for the risk I'd take, I'll start thinking about buying NOK in the very low $5's, depending on the lay of the land at that time.
Don't share your enthusiasm. Inventory continues to increase and storage space practically non-existent. More dividend cuts are on the way. The latest by COP. More MLP upstreams will go BK. And OPEC (Saudis and Iran) and Russia continue to pump at max rate. Need at least 2M bbl/day reduction to balance supply/demand and that ain't happening anytime soon. These guys can't even be in the same room with each other.
U.S. shale production cuts in the U.S. are down only a few hundred thousand bbl per day,
although the rig count is way down. Production hasn't been affected nearly enough only new exploration.
Bottom line there is no rush to get into any of these oil names including the big Integrateds.
Wasn't it you, earlier last year, jumping up and down pumping these same oil names? How much have they dropped since your last buy post?