NYSE tech stocks are usually 2x book value, Nokia is still way much below that.
According to Morningstar´s valuation, the sum of parts of Nokia (NSN, Navteq, feature phones, smartphones and patent portfolio)
is worth much more than Nokia´s stock price right now, not to mention Nokia´s $5.7 billion net cash added to that value!
Two years ago NOK was still about $15, now the stock is only over $4, the reason is that the stock has been over sold.
Nokia is the most short sold stock in both Helsinki and New York! The shorts are still over 20% in Nokia´s total share number which is approximately 3.75 billion shares.
This is a huge number, considering Apple´s short interest is only around 1% and Samsung´s around 2%. When Nokia is here to stay, the shorts need to be covered and the stock will skyrocket from these levels.
Nokia Apple Intel Microsoft Cirrus Logic
0.32 3.0 2 3.0 3.76
Note that Nokia is currently selling at 0.32 price/sales ratio. This means that if the company manages to restructure and return to normal profitability, the stock has the potential to become a 10x bagger (even from today's price levels) - assuming the market will value Nokia 3.0x sales like Apple or Microsoft. But even a price/sales ratio of 2, like Intel has, means a 6x bagger from these levels.
In the face of q4 results, company turning around, outlook, China etc.,, too many things to repeat here, shorts are still on vacation not reading reports, believing Nokia is just a giant trading machine.
It may be prudent to short a stock that has risen and its best days are behind them, an example might be Apple. This may work, although I have never shorted a stock.
It seems to me that shorting a stock that is clearly in turnaround, great financial position, great marketing position, huge line of newly released products which are admired and differentiated at all price points, at historic lows, undervalued relative to its potential, undervalued relative to its competitors etc., etc, etc...is a ridiculous position to be in.
It doesn't add up, you would think they would go long and reap the rewards.
However if your intention is to take over a company or a substatntial portion of the company this would be a good strategy to keep the price low while you simultaneously accumulate shares at very low prices.
A large short position is a scare tactic for the un-informed, making investors stay away or sell their shares. I would bet that the likes of Goldman Sachs and others could be collecting shares for themselves and special clients who have asked them to forward purchase below an agreed upon price, probably under $5.
If you think about it, how else would you explain GS accumulation while having a sell rating on Nokia.
Too many things don't add up, that usually means some kind of deception is taking place.
The shorts are on our side now, in shorting they have become dedicated buyers, that is the catch 22.