|Bid||4.0200 x 305200|
|Ask||4.0400 x 308700|
|Day's Range||4.0000 - 4.0900|
|52 Week Range||3.3300 - 6.6500|
|Beta (5Y Monthly)||0.06|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||0.22 (5.52%)|
|Ex-Dividend Date||Jul 28, 2019|
|1y Target Est||4.61|
At this point, Nokia (NYSE:NOK) is a 5G (fifth-generation) wireless play. And one of the potential drivers of Nokia's growth in 5G is political pressure on key rival Huawei. The combination of a growing market and a weakened competitor has been a key pillar of the bull case for Nokia stock.Source: RistoH / Shutterstock.com The problem is that the competitive environment hasn't been quite as favorable as bulls hoped, at least so far. The company itself lowered 2020 earnings per share guidance after its third quarter report in October. 5G in fact was a key culprit in that cut.Nokia forecast higher-than-expected spending this year in a bid to better compete in 5G. As a result, operating margins are expected to be 3 to 4 full points lower than previously thought.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNOK declined 24% on the lowered outlook, its biggest one-day decline in 19 years. Shares have rallied in recent weeks, and the gains do make some sense. But the broader issues remain. * Invest in America's Most Trusted Brands With These 7 Stocks to Buy This is a company with a long history of overpromising and underdelivering. It hasn't proven it can win enough in 5G to support even the currently modest valuation. Meanwhile, it's becoming increasingly clear that hopes for a two-company race in networking equipment may have been too optimistic. Huawei PersistsOn May 15, 2019, President Trump signed an executive order that effectively banned Huawei from the U.S. market. Huawei also faces limitations on using components from American suppliers; memory chipmaker Micron Technology (NASDAQ:MU), for instance, forecast a big hit to revenue following the order. Apps from Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) now are unavailable on Huawei smartphones.The pressure goes beyond the U.S. market. The Trump Administration has leaned on allies such as Britain and Germany to remove Huawei from their telecommunications infrastructure. That pressure would seemingly leave Western 5G deployments as a two-company race between Nokia and Swedish rival Ericsson (NASDAQ:ERIC).But as Bloomberg detailed earlier this month, it hasn't quite worked out that way. The furor over Huawei actually has led to increased name recognition, and the company's sales rose 18% in 2019. Some -- and possibly most -- of that growth is being driven by the smartphone business, but Huawei's networking business "isn't just surviving; it's actually thriving in some areas," particularly in Asia.In Germany, lawmakers are pushing for Huawei's removal from the country's telecommunications network -- but the government led by Prime Minister Angela Merkel is pushing for its inclusion. Telefonica Deutschland (OTCMKTS:TELDF) chose both Huawei and Nokia for its 5G deployment despite that controversy, another data point showing the Chinese supplier's ability to remain competitive in Europe. The 'Simple' Case for Nokia StockTo be sure, Huawei is going to be hamstrung in key markets for 5G equipment. U.S. pressure will have an impact -- and that's going to benefit Nokia as it looks to ramp up 5G equipment sales.But that pillar alone doesn't look like enough of a driver for Nokia stock at this point. Nokia still lags behind Ericsson and Huawei in announced 5G wins. 2020 guidance has been cut, and investors should take even that reduced outlook with a grain of salt given the company's history.Meanwhile, 5G does help growth -- but Nokia loses some sales of 4G equipment in the process. There's a net positive, yes, but it's not as if Nokia's revenue growth suddenly is going to accelerate into the double-digits. That's particularly true if Huawei maintains some level of market share in networking equipment, as appears to be the case.And so the "simple" bull case here isn't simple, but overly simplistic. Yes, 5G helps, yes, the Huawei ban, in whatever form it eventually takes, is a positive. But execution has been poor. Nokia might gain some share from Huawei, but it's clearly losing share to Ericsson at the same time. The dividend is gone, and this company has disappointed investors for years despite being on the right side one of the worst deals in recent history: Microsoft's (NASDAQ:MSFT) $7.6 billion acquisition of Nokia's smartphone business in 2013.Put another way, there are plenty of reasons why Nokia stock hit a six-year low in November, and there are plenty of reason why the recent bounce should be discounted. It's possible Nokia can claw its way back to growth and positive returns, but it's going to take a lot more than a bit of help from the U.S. government.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks on the Move Thanks to the Davos World Economic Forum * Invest in America's Most Trusted Brands With These 7 Stocks to Buy * 7 Earnings Reports to Watch Next Week The post Why Pressure on Huawei Isn't Going to Save Nokia Stock appeared first on InvestorPlace.
The head of Finland's state investment firm Solidium criticised Nokia for poor communication on Thursday and said he had sent management some "feisty feedback" after its sudden profit warning in October. "We were very disappointed by the radical change in (Nokia's) guidance and above all in their communications about it," Solidium's Chief Executive Antti Makinen told Reuters in a sharp rebuke to the company from its biggest shareholder. On Oct. 24 Nokia slashed its 2019 and 2020 profit outlook and halted dividend payouts, saying the company would need to spend more to fend off rivals in the fast-growing 5G networks business.
Dividend paying stocks like Nokia Corporation (HEL:NOKIA) tend to be popular with investors, and for good reason...
Let's get the bad news out of the way first. The trend in Nokia (NYSE:NOK) stock is awful. It is now back to its levels from 1997 -- incredibly far from its dot-com high of $62. In all fairness, a lot has happened since then, so it's important to watch this trend.Source: RistoH / Shutterstock.com And the trend in question shows potential upside even after the recent rally.OK, now it's time for the good news. After the market's hideous reaction to Nokia's October earnings, NOK stock rallied 25% off the bottom. But now it's back into a pivotal zone that dates back to November 2016. If you don't remember, it was during that time period when the stock rallied 65% in the aftermath of President Donald Trump's election.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFrom a technical perspective, as Nokia stock returns to this zone, it will face resistance. The good news is that the earnings drop left a giant open gap that it's now trying to fill up to $5 per share. NOK Stock Has Support and OpportunitySource: Charts by TradingView Management is trying to convince Wall Street that the company has good prospects. Nokia recently trimmed jobs in some areas to concentrate more on 5G. So on the face of the matter, it is trying to be in the right spot for at least the next two years. And investors have lately been giving NOK stock the benefit of the doubt. * 7 Small-Cap Stocks That Are Not Worth a Second Glance So if I'm long the stock I can wait to see the outcome of this technical struggle. The challenge is that the whole stock market is at all-time highs, so if the S&P 500 corrects, it will drag NOK stock down with it.Fundamentally, there are few experts in the field anymore as changes are coming at a blinding pace. Nokia sells at a low price-to-sales multiple, so from that perspective there's not a lot of risk behind owning the shares at current levels. Nevertheless, a broken chart like this sometimes is a sign of a broken company. We might find out that Nokia is actually broken.But we shouldn't judge based on that. For now, it is best to use the charts for clues. I noted the resistance above, but the technicals also suggest that there is support below near $4 per share. So the bulls can withstand small dips to continue the recovery rally. Changes Should Come SoonEarnings are coming soon, and judging by the reactions to prior reports, this is going to be binary risk. Leading up to the results, investors should be humble in their convictions on NOK stock. There is no way to predict how the markets will react to the next earnings report. In the short term, it is a complete guess, regardless of how good or bad the actual numbers are. It is all about expectations, and Wall Street is very unpredictable that way. There is a history of great reports triggering 20% selloffs, and horrendous ones spurring rallies.So to be on the safe side, it is best to lock in some profits just in case. It's not often that we get a 25% return in under a month and regardless of the outlook on NOK stock, discipline requires us to actually cash some shares in.The consensus on Wall Street is predominantly bullish these days and this makes me nervous. I was bullish all of last year, so now that everybody is bullish it's my turn to worry. I believe that caution here is the best course of action.So let's end this on a good note. While NOK stock is not likely to recover all its old glory of the dot-com era, it has more technical upside here as long as management does its job.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room for free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post After a 25% Rally, It's Time to Take Profits in Nokia Stock appeared first on InvestorPlace.
The Finnish telecoms equipment maker Nokia said on Tuesday it plans to cut around 180 jobs in Finland this year, while also planning to invest more in 5G technology and digitalization. The company said its 5G product development in Oulu and elsewhere in the country would be excluded from the 180 job cuts this year, out of its 6,000 employed in Finland. The company is on a quest to restore investor confidence following concerns that it is lagging its peers Ericsson and Huawei [HWT.UL] in 5G development.
Nokia (NYSE:NOK) stock has been dead money for a decade. But recent developments on the chart of NOK stock appear to be setting up a bullish trade. I expect only short-term gains by NOK, so don't expect any rosy commentary on the ailing company's chances of reclaiming its former glory.Source: RistoH / Shutterstock.com I lack the necessary boldness or insight to predict that type of resurrection. But NOK doesn't have to rise to its prior peaks to generate profits for tactical traders. Just small advances will do. Let's take a closer look at the charts to see what's in store for NOK stock. The Big PictureSource: The thinkorswim® platform from TD Ameritrade In 2013, NOK stock surged from $3 to $8 in short order. But ever since then, it's been a steady, consistent return to the abyss. Multiple disappointing earnings reports have sped up the decline, with the last plunge occurring last October.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith such an entrenched downtrend on the weekly chart (see above), it's impossible to bet on a long-lasting rebound. NOK stock is simply facing too much resistance overhead for that to occur anytime soon. For now, the bulls need to be nimble and take profits when they can.If Nokia stock rises above $5.85, I would change my cautious tune. But until then, the weekly downtrend will dominate. * The Top 15 Stocks to Buy in 2020 Daily Time FrameSource: The thinkorswim® platform from TD Ameritrade The daily view reveals the real reason for today's bullish trade idea. October's earnings fiasco left a huge gap in its wake. Gap areas provide interesting price zones to trade against. The easy-to-spot support and resistance levels provide clear entry and exit points. If NOK starts to fill the gap by rising above $4.10, it has ample room to run before any ceilings come into play. This suggests some quick gains could be in store if buyers press their bets at this point.NOK's volume patterns have turned bullish in recent weeks, with accumulation days multiplying. These high volume rallies suggest institutions are wading into the waters and could continue to support NOK stock's recovery bid. The 20-day moving average and even the 50-day moving average are rotating higher, confirming buyers' newfound control of the short-term and intermediate-term trends.Finally, the RSI of Nokia stock just rallied to its highest level since last July, suggesting that we're seeing more upside momentum than at any time over the past six months. The TradeWe could consider trading options, but why bother? Nokia stock is cheap enough to make it similar to an option, so the complexity of using derivatives is unnecessary.Buy NOK stock if it pushes above its gap resistance at $4.10. A push towards the 200-day moving average near $4.77 is the ultimate target, but I would take partial profits along the way in case the stock lacks the mustard to fill the entire gap.As of this writing, Tyler Craig didn't hold positions in any of the aforementioned securities. Want more education on how to trade? Check out his trading blog, Tales of a Technician. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 15 Stocks to Buy in 2020 * The 7 Most Important Companies That Didn't Survive the 2010s * 4 Mega-Tech Stocks Reaching for the Sky The post Nokia Stock Is a Dog, But It Looks Good for a Trade appeared first on InvestorPlace.
"I do not believe the introduction of motorcars will ever affect the riding of horses."That's what John Douglas-Scott-Montagu, a member of the British Parliament, declared in 1903. That may sound absurd now, but it was the accepted wisdom of the time.Just five years later, Henry Ford was mass-producing Model Ts. And within one decade, 10 million Americans were puttering around in motorcars.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAutomobiles aren't alone. Breakthrough technologies often become commonplace necessities more rapidly than anyone can imagine at the outset.The electric vehicle (EV) will be no different. This breakthrough technology will gain global popularity and market share much more rapidly than most folks expect.Likewise, the energy storage technologies needed to make electric vehicles and other technologies possible will fan out across the globe at a spectacular pace.These burgeoning technologies are the seeds of what I'm calling "The Second Electric Revolution." These innovations are quickly becoming world-altering phenomena -- the likes of which the planet has not seen since Thomas Edison demonstrated his new electric streetlights in 1879. * The 7 Most Important Companies That Didn't Survive the 2010s I expect the Second Electric Revolution to introduce sweeping technological advancements that will impact our daily lives in ways we can't yet comprehend.Already, electric vehicles are stealing market share from gas-fired vehicles, while renewable power technologies are grabbing market share from thermoelectric power generation thanks to utility-scale energy storage systems.Both of these stories are very new and very big.We've seen this movie before … From Flip to SmartIn 2006, cell phones were still nothing more than mobile telephones.Nokia Corp. (NYSE:NOK) and Motorola Solutions Inc. (NYSE:MSI) dominated the market with compact flip phones. Smaller was better. Each new cell phone design offered slightly better functionality than the preceding version, but at a lower weight and smaller size.If someone had asked you or me back then what a cell phone would look like in 2020, we probably would have said it would be the size of a postage stamp, weigh about two ounces, and be clipped to our ear. We could not have guessed that cell phones would increase in size and offer the functionality of a laptop computer.And if someone had asked us back then if Apple Inc. (NASDAQ:AAPL) stock was a better "buy" than Motorola or Nokia, we might have answered, "No way!"That would have been a bad call.The flip phone was about to perish, and the smartphone was about to burst onto the scene.In January 2007, Steve Jobs announced the launch of the iPhone - and the world of mobile communication entered an entirely new paradigm.Globally, consumers bought about 122 million smartphones in 2007. In 2019, they bought 13 times that number.This story of breakthrough technological success has repeated itself over and over in history, especially here in the United States during the last century. Technological marvels like radios, televisions, washing machines, microwave ovens, and personal computers gained widespread acceptance at a lightning-fast pace.Now, as we enter a whole new decade, five new technologies are growing so rapidly and profitably that they deserve the attention of every investor.These five technologies are not merely delivering conspicuously strong revenue and earnings growth. Their growth trajectories are gaining momentum.I believe these are the five technologies that will make investors rich in 2020. Solar-Plus-Energy StorageSolar power is no longer a profitless curiosity -- it is a profitable industry that is attracting robust global demand. It is an idea whose time has come … especially for investors. According to the International Energy Agency (IEA), solar-power capacity will soar 13-fold by 2040, at which point this renewable source would be providing two-thirds of the world's power needs. Moreover, the IEA anticipates global spending on solar power to total $4 trillion over the next two decades - or about $180 billion per year. If investment of this magnitude were to occur, solar power would become the world's primary electricity source by 2040. Payment ProcessingDigital and card payments are the future. Gone are the days of cash and coins, and here are the days of credit cards and e-payments. As an enabler of noncash payments across multiple channels, Square Inc. (NYSE:SQ) is at the core of this transition. Its mobile devices, which attach to a smartphone, allow retailers of all shapes and sizes to affordably and easily process card payments. It has an online presence through software that does the same thing for e-payments. Square soared as much as 1,000% after its 2015 initial public offering - and is still up more than 400% from its IPO price. There's another stock in this same space about to take off on a similarly profitable path, and you can bet it's on my radar. Online GamblingThanks to a 2018 U.S. Supreme Court ruling, sports betting is no longer illegal on the federal level. It's now up to each state to decide if, how, and when sports betting operates within its borders. That means each of the 50 state legislatures and/or gaming authorities will determine the rules for its own state. By the end of 2020, analysts believe that more than half the states in the union will approve sports betting in some form - and up to 40 states by the end of 2024. Therefore, it is clear that a significant opportunity is developing. Estimates range from $150 billion to $400 billion in annual transactions, up from essentially $0 just a couple of years ago. Artificial IntelligenceA recent study by Accenture found that in 12 advanced economies with combined GDPs of roughly $61 trillion, artificial intelligence (AI) can double economic growth by 2035. That's leading to a whole lot of spending - and opportunities to make money - on AI technologies. IDC expected worldwide spending on AI systems to climb 44% in 2019 to $35.8 billion, with some $13.5 billion going to AI software platforms and AI apps. No wonder AI has quickly become red-hot. After all, the market opportunity is massive. Gartner estimates that spending on AI will grow at an average compound annual growth rate of 18%, reaching $383.5 billion in 2020. Battery MetalsToday's high-tech batteries require huge amounts of metals like lithium, cobalt, copper, nickel, graphite and vanadium. The average battery-powered electric vehicle requires 183 pounds of copper. That's about four times the amount of copper the average internal combustion auto contains. A typical EV also requires about 120 pounds of graphite, along with significant quantities of nickel, cobalt, and lithium. The average solar project requires about five times as much copper per megawatt of capacity as a conventional fossil fuel plant. Offshore wind farms demand about 10 times as much. Meanwhile, the leading energy storage technologies also require massive quantities of "battery metals." So the boom in EVs, renewables, and energy storage will create major "echo booms" in several metal markets.These five megatrends will be booming for a very long time.And so will five stocks I've spotted that investors can use to build their wealth as these tech trends soar.I profile all five of these companies in a brand-new free report -- Top 5 Stocks for 2020.In this free report, I show you how and why these five stocks will grow so rapidly in 2020 … and beyond.They deserve the attention of every investor.To get that report - and to become a founding member of Smart Money, my brand-new free weekly newsletter - click here.Regards,Eric FryP.S. Eric is now revealing his Top 5 Stocks for 2020 -all in a single special report -- for FREE! Click here to get this FREE report - and to become a founding member of Smart Money, Eric's brand-new FREE weekly newsletter. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 of the Strangest Stocks Worth Your Time * 7 Stocks to Buy That Trump's Tax Cut Truly Rewarded * 5 Stocks That Could Double in 2020 The post 5 Megatrends That Portend Tomorrow's World appeared first on InvestorPlace.
Technology evolves, and the next step in cellular tech is upon us. 5G is here, and effects will build over the next several years, as providers, device makers, and app writers adapt to the new capabilities. The new standards were set two years ago, and carrier networks started going live in the middle of last year. Early in December, T-Mobile launched the first 5G nationwide network.The main advantages that 5G will bring are already known: more room on the data channels will speed up connections; lower signal latency will make connections more responsive; and most important of all, 5G will allow users to connect more devices simultaneously. For the moment, these advantages are not fully available, as the new system still relies on existing 4G networks to make the initial connection.This brings up a final key point about 5G. The low- and mid-band frequencies on the new tech will expand the channels but won’t offer huge changes in performance. That will come with high-band 5G, on the new millimeter wavelengths. This is a segment of the radio spectrum that has not been used much for consumer applications yet, and so it has a lot of available space. As those regions start to fill – that’s when users will really see service improvements.Of course, the high-band 5G comes with a drawback – its range can be measured in hundreds of feet than quarters of miles. Providers will need to set up much denser tower networks to provide full nation-wide coverage.Those denser networks, making available the high-band frequencies, will also require changes in the devices, and the semiconductor chips, in the customers’ hands. And that, in turn, will give a boost to the tech sector – especially the companies making those devices and chips.With the information about the lightning fast technology in hand, then, we've used TipRanks’ Stock Screener tool to get the scoop on 3 companies ready for the oncoming 5G onslaught. Let’s take a closer look.Telefonakiebolaget LM Ericsson (ERIC)Swedish-based Ericsson operates on the network end of the telecom industry. The company develops and provides the software and equipment necessary for business and consumer wireless networks. In addition, Ericsson has its fingers in the cable TV, mobile platform, and power module pots, and operates in 180 countries. Among the company’s assets are more than 49,000 patents, with a heavy emphasis on wireless tech.The strength of Ericsson’s products and market position is evident from the quarterly numbers. In Q3, despite having to account for a $1.23 billion fine from the SEC, and the consequent net income loss, the company reported strong sales growth of 6%, with the largest gains in the North American and Northeast Asian markets. Totals sales reached $5.8 billion. More importantly, the company revised its 2020 full-year earnings guidance upward, to the $23.5 to $24.5 billion range – a billion-dollar increase.Ericsson is heavily invested in China’s emerging 5G conversion, although the company states that it is still too early to quantify precise results. CEO Borje Ekholm said of the new network rollout, “5G is taking off faster than earlier anticipated, and we see initial 5G buildout as a capacity enhancer in metropolitan areas.”Some of Wall Street’s top analysts are impressed with Ericsson’s quick moves into what is shaping up as the world’s largest 5G wireless market. From Canaccord, 5-star analyst Michael Walkley writes, “We believe Ericsson has a solid foundation for continued margin expansion and remains on track to achieve its 2020 operating margin target of >10% and 12-14% by 2022. Further, with the recent EU cybersecurity report not singling out China as a threat, followed by Huawei being allowed in France… we believe Ericsson has the potential for solid share of China 5G contracts beyond the ~10% LTE share.” Walkley backs his optimism with a Buy rating and an $11 price target, indicating confidence in a 24% upside for the stock. (To watch Walkley’s track record, click here)Exane BNP Paribas analyst Stefan Slowinski added, "After a small downgrade to margin expectations post Q2 results, consensus margin momentum has again moved higher, as we expected, post Q3 results. Consensus now expects 11.6% 2020 adj op margins. Consensus expects Networks op margins to decline 20bps in 2020, despite the end of the ‘strategic projects’ headwinds, likely due to cautious Chinese assumptions. The stock is trading on just 9x EV/2020 co. adj EBIT, despite improving cash flows, a likely growing dividend, and major 5G ramps in 2020." As a result, Slowinski rates ERIC stock an Outperform with a price target of $11.40. (To watch Slowinski's track record, click here)Overall, ERIC shares get a unanimous analyst consensus rating of Strong Buy, based on 4 recent Buy reviews. Shares are priced low for the tech sector, at just $8.85, while the $12.13 average price target suggests room for 37% growth to the upside. (See Ericsson stock analysis at TipRanks)Nokia Corporation (NOK)We stay in Scandinavia with our second stock, Finland-based Nokia. The company is well known-for its cell phone handsets, and its classic 3310 ‘dumb phone’ model continues to have a following even in today’s smartphone market. Nokia, like Ericsson, manufactures and markets network equipment, software, and related services on a global scale, with operations in over 130 countries. With annual revenues well upwards of 20 billion Euros, Nokia is a significant part of Finland’s entire economy.The wireless industry’s move to 5G, while opening up plenty of opportunities, does not come without cost. That was made clear by NOK’s Q3 2019 report. The company noted the high cost of first-gen 5G equipment and crossover pricing pressures as headwinds. The numbers showed both the good and the bad. Total sales were up, to 5.69 billion Euros, while EPS rose from a loss of 2 cents in the year-ago quarter to a profit of 1 cent now. The EPS did, however, miss the forecast by 1 cent. Investors could stomach the revenue and earnings number, but the company also lowered its outlook for both 2019 and 2020.Canaccord’s Michael Walkley, quoted above, has also reviewed NOK, and says of the stock and company, “[We believe] Nokia will execute on its revised margin and cost reduction targets to drive improving margins in 2021 when global 5G builds drive better top-line trends and cost reduction plans are achieved… Despite near-term margin pressure from 5G first generation products [and] pricing pressure on early 5G deals… we expect Nokia to emerge as a long-term leader for 5G buildouts with steadily improving margins over the next several years…”Walkley’s Buy rating on Nokia comes with a $5.50 price target, suggesting that this stock will see 44% growth in the coming year. (To see Walkley’s track record, click here)Overall, Nokia’s Moderate Buy consensus rating is based on an even split among the analysts – stock has 4 Buys and 4 Holds. Like shares in ERIC, NOK is priced at a discount – just $3.81. The average price target of $4.73 implies an upside potential of 24%. (See Nokia’s stock analysis at TipRanks)Micron Technology (MU)Micron is one of the semiconductor industry’s big names – in 2018, the company had the fifth highest global sales among its peers, at $31.8 billion. With a large part of Micron’s design and manufacturing infrastructure heavily dependent on the movement of materials and components between the US and China, the trade tensions between the two giants has put serious pressure on the company.Micron’s market position as one of three major producers of DRAM chips ensures it a secure position as the expansion of 5G networks increases demand for semiconductors. The company’s NAND flash storage will also be a key component in the new systems. Micron’s experience with gaming systems and data centers – and their need for lots of memory – puts it in an enviable position to capitalize on the growth of data storage in the new networks.Wedbush analyst Matt Bryson is bullish on Micron’s opportunity to take advantage of the 5G expansion as it ramps up this year. He writes, “Demand for both NAND and DRAM should accelerate through the course of 2020. There are numerous product cycles in place driving additional demand, including: 5G handset roll-outs, new gaming consoles, as well as improving hyperscale server spend.”Getting into details, Bryson makes it clear that it’s not just new handsets – and their associated chips – that will drive demand for Micron products. He adds, “[W]e would note that we see memory consumption in 5G networking equipment, new last mile servers (needed to support lower 5G network latencies), new IoT equipment related to 5G, etc. as all ancillary demand drivers tied to 5G that should benefit memory consumption, at the margin.”Bryson is confident in his Buy rating on MU shares, and gives the stock a $65 price target. His target implies an upside of 19%. (To watch Bryson’s track record, click here)Like Nokia above, Micron has a Moderate Buy consensus rating. But in Micron’s case, this consensus includes 16 Buys. The stock’s 64% gain in 2019 clearly impressed Wall Street’s analysts. MU shares are selling for $54.53, and the average price target of $62.36 suggests a further upside of 14%. (See Micron’s stock analysis at TipRanks)
As I write this late on Jan. 2, Nokia (NYSE:NOK) is having a good day on the markets. NOK stock was up almost 5% on the day. More importantly, Nokia stock gained 6% in December, ringing in the New Year in style. Can it keep up its momentum? Source: RistoH / Shutterstock.com InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlthough I'm on record as being against buying NOK stock if it doesn't pay a dividend, I do think that the skepticism surrounding the Finnish maker of telecom equipment is starting to lift, and that should result in some more optimistic projections from analysts in 2020. * 10 2019 Winners That Will Be 2020 Losers The question is whether its December momentum makes it a buy early in 2020. Commentary Getting More BullishInvestorPlace contributors like me have generally been quite bearish about Nokia's prospects throughout most of 2019. Things began to change in late December, with several prognosticators turning bullish. My Canadian colleague, Brad Moon, wrote on the final day of 2019 that 2020 could be a big year for Nokia. Brad knows a thing or two about electronics; his comments have peaked my interest. "The past 10 years have seen Nokia battered, and it has become arguably the biggest casualty of the smartphone era. It goes into 2020 with its name once again on smartphones and retro feature phones, a strong patent portfolio, and a networking business poised to profit in a big way from the 5G rollout," Brad wrote on Dec. 31. "Barring any major miscalculations, look for the Finnish company to once again begin climbing that Fortune Global 500 list."Sometimes, given a stock price less than $4, we investors forget that Nokia is still the 466th-ranked company on the Fortune Global 500 list, with almost $27 billion in annual revenues and $45 billion in assets. It still is a massive company with approximately 103,000 employees worldwide. Yes, it doesn't generate operating profits on an International Financial Reporting Standards (IFRS) basis; it lost 318 million euros in the first nine months of 2019. However, on a non-IFRS basis, its Q1-Q3 operating profit was 869 million euros, down 18% from a year earlier, but positive nonetheless. The Altman Z-ScoreI haven't done an Altman Z-Score for Nokia. Anything less than 1.81 suggests there is a reasonable probability of going bankrupt within the next 24 months.According to Gurufocus.com, Nokia's current Altman Z-Score is 1.15, which suggests it is in financial distress. By comparison, Nokia's best Z-score over the past 10 years is 21.69, seven times the minimum score needed to be considered safe from bankruptcy. The Z-Score isn't perfect, and it can change on a dime based on an improving or deteriorating financial situation. It's best to consider the changes from quarter to quarter. In 2020, should its 5G business take off as Brad suggests, NOK will quickly move into the safe zone. Nonetheless, I think it's important to realize that despite having $45 billion in total assets, it is still far from being a perfect investment. Is NOK Stock a Buy?As I've stated in past articles, if you are interested in betting on 5G through a single stock, there are much better and less risky alternatives. InvestorPlace's Will Healy recently recommended five 5G stocks to bet on, one of which was Nokia. For my money, I'd go with Apple (NASDAQ:AAPL) or Intel (NASDAQ:INTC) before I'd bet on any of the other three. But that's a subject for another day. Although I wouldn't recommend Nokia stock to anyone who's saving for retirement or their kid's education, I do feel the 5G prospects continue to titillate speculative investors.If you can afford to lose it all, the recent momentum would suggest now is the time to take a flyer on Nokia stock. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 2019 Winners That Will Be 2020 Losers * 5-Year Returns for 5 Dow Jones Stocks Entering 2020 * 5 Semiconductor Stocks to Buy for Big Gains In 2020 The post Nokia Has Momentum Early in 2020, but Is It a Buy?Â appeared first on InvestorPlace.
Once-iconic cellphone manufacturer turned telecommunications network equipment maker, Nokia (NYSE:NOK) has consistently tested investors' patience. Having ceded its dominant position in mobile to Apple (NASDAQ:AAPL), the Finnish telecom firm has shifted its eyes toward 5G. But even with this transformation, the company continues to disappoint.Source: RistoH / Shutterstock.com One only needs to look at Nokia's equity value to recognize the overwhelming challenge management faces. Just prior to releasing its results for the third quarter of 2019, Nokia shares had already lost more than 7%. In contrast, shares of regional telecom rival Ericsson (NASDAQ:ERIC) were up nearly 9% in the same timeframe.But the real bleeding happened after the Q3 report. Again disappointed, investors took no time mercilessly pummeling Nokia's equity. In the aftermath, shares limped home to a 2019 loss of almost 33%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOn the surface, management's decision to slash its 2019 and 2020 profitability outlook was the main culprit for Nokia's terrible losses in the markets. Furthermore, the leadership team cited increased competition in the 5G space, with many tech firms eager to take share in the early stages of the rollout. * 7 Stocks to Buy for January and Beyond While that no doubt added to the company's long and growing list of woes, it's the reason for the slashed outlook that most concerns stakeholders. Up until the Q3 disclosure, Nokia was committed to utilizing field-programmable gate array (FPGA) integrated circuits for its 5G products.FPGAs have the advantage of post-manufacturing flexibility and programmability. Essentially, this allows Nokia's customers to configure their equipment to address specific needs. However, FPGAs have one critical drawback, at least from a fiscal perspective: they're incredibly expensive.Nokia, or more specifically its customers, found this out the hard way in Q3. Nokia Bumbles Toward the 5G RolloutNaturally, you can see why Wall Street was hardly amused at the admission. A company that's as fiscally vulnerable as Nokia shouldn't have taken such big risks. Frankly, they're in no position to recover if they misfire. And most investors viewed the FPGA fiasco as a misfire, punishing shares severely.But it gets worse. In order to make up for the mistake, the company's executives stated that they will shift to system on chip (SoC) integrated circuits. That might resolve the cost issue associated with the FPGA rollout. However, it makes the company appear as if they're bumbling toward the 5G revolution by accident rather than by choice.More importantly, Nokia is now well behind in the 5G race. Currently, 5G's chip leader is Qualcomm (NASDAQ:QCOM), which developed its Snapdragon 7 5G-capable platform using SoC circuits. That means Nokia spent time they can't afford to lose chasing an economically unsustainable platform.At this point, covering analysts saw the writing on the wall. Qualcomm, with its infinitely more stable financial status, apparently eschewed FPGA for cost reasons. Why then did the substantially weaker Nokia pursue this circuit platform?To be fair, management declared that they're pulling out all the stops to push out SoC-based 5G products. During the Q3 conference call, they disclosed that they hired hundreds of workers to accelerate the chipmaking process.Here's the thing: Nokia's shares have been speculative for several years. A substantive recovery by itself would have been a herculean task. But now, the telecom firm is behind the eight-ball against some of the biggest titans in the industry.In other words, this is an organization that lacks credibility, yet it's asking investors for patience. Well, I'm afraid that patience is gone. A Low-Confidence Speculative GambleDespite the dark cloud surrounding Nokia, not everything about the company is a wash. Admittedly, the company has inked many 5G-related deals. Moreover, the geopolitical situation between the U.S. and China helps the Finnish company. * 10 2019 Winners That Will Be 2020 Losers Sure, the two nations are engaged in promising talks to sign a phase one trade deal. But phase one is merely the trailer to the final screening. Based on recent history, a lot can go wrong until then. And if it does, Nokia is a much more trusted name than Huawei.Plus, with shares as deflated as they are, speculators with "dumb money" may want to take a shot. For everyone else, this is a name to avoid.Although 5G is a promising market, as management acknowledges, the competition has grown fierce. Further, Nokia has limped along in survival mode, needing to do everything right and some stars to align. But management has already made a critical mistake. This makes a seemingly impossible mission more difficult.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for January and Beyond * 7 Excellent Value Stocks to Buy for 2020 * 5 Hot Housing Stocks That Could Stay Hot in 2020 The post How Many Lives Does Nokia Have Remaining? appeared first on InvestorPlace.
While Verizon (VZ) beats its 5G coverage target for 2019, Vodafone inks a deal with Nokia (NOK) to deploy 5G services in Australia.
Nokia (NOK) seeks to upgrade SETAR's network using its massive MIMO technology with 64 antennas to enable new mobile broadband uses cases like FWA, AR/VR and smart cities.
Cisco Systems (NASDAQ:CSCO) stock admittedly looks attractive at the moment. Cisco is a wonderful company, the dominant player in networking. And Cisco stock looks cheap. Shares are valued at just 14x the fiscal 2021 consensus earnings-per-share estimate. That's a valuation that prices in little in the way of growth.Source: Ken Wolter / Shutterstock.com The problem of late is that Cisco isn't posting much of that growth. Two consecutive earnings reports have disappointed investors and sent Cisco stock tumbling. Shares have recovered a 7.3% decline after the fiscal first-quarter report in mid-November. But CSCO stock still sits 18% below its 52-week high.If that growth can return, Cisco stock can and likely will rally. But at the moment, that's a big "if," and near-term upside will be limited unless and until Cisco can generate some optimism from the market.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Key Question for CSCO StockCSCO has tumbled after each of its last two earnings reports. The November selloff followed an 8.6% decline in August resulting from the company's fiscal fourth-quarter release.In both cases, the actual report wasn't the culprit. Cisco beat analyst estimates on both lines in both quarters. In fact, the company hasn't disappointed relative to Street expectations since 2014. Rather, Cisco's outlook was the issue. Second-quarter guidance was particularly weak: Cisco expects revenue to decline 3% to 5% year-over-year. Earnings per share should increase by roughly the same amount, but all of that growth and then some is coming from share repurchases. * 7 'A'-Rated Stocks to Buy Under $10 The question at the moment is whether the weakness seen in recent quarters simply is a short-term phenomenon. There's some reason to believe that it is. The trade war has disrupted demand from China. After the first quarter report, Chief Financial Officer Kelly Kramer told Barron's that orders from that country had declined 31% year-over-year.5G wireless provides an opportunity, but not yet. CEO Chuck Robbins said on the Q1 conference call that those networks wouldn't drive sales until the second half of fiscal 2021. Those sales should deliver some of the growth for which Cisco is looking. More broadly, networking demand simply seems soft, but should rebound at some point thanks to 5G and other factors.The bull case, in short, is that the current situation will pass. Growth will return, and the multiple assigned to Cisco stock will expand. Something like 17x $4 in EPS -- up from an expected $3.24 this year -- gets CSCO stock near $70. Add in a 3% dividend yield, and total return equals roughly 50% in a matter of years. The Risk to Cisco StockBut the core worry is that recent quarters aren't just the result of short-term factors. Rather, they're the sign of a reversion to the mean.After all, end market growth for Cisco, particularly in the core networking business, remains minimal. Cisco has added software revenue to hardware sales with products like the Catalyst 9000 series of switches, but even that hasn't been enough to drive real growth of late. Rival Juniper Networks (NYSE:JNPR) has been one of the S&P 500's worst stocks over the past six years, gaining less than 9% total. Demand weakness is a key reason why.Cisco has alleviated that pressure through software development and acquisitions. In fiscal 2019, for instance, applications revenue increased 15%. Security sales climbed 16%, thanks in large part to the purchase of Duo Security. Infrastructure platforms revenue, however, climbed just 7% -- and that was a good year. That category actually saw sales decline in the first quarter.If the software tailwind, in particular, fades, then perhaps Cisco's growth stalls out. 5G is a help, but it's not a panacea, as the travails of Nokia (NYSE:NOK) show. And this is a stock that has struggled in the recent past. In fact, from 2007 to 2017, CSCO stock basically had a lost decade, with annual share price appreciation in the 1% range. * The 10 Best Mutual Funds for Your 401k One of the core questions here, as I noted last year, is whether Cisco is something closer to Microsoft (NASDAQ:MSFT) or more akin to IBM (NYSE:IBM). Can it, as Microsoft did, leverage a massive user base and the shift to the cloud to jumpstart growth? Or, as with IBM's mainframes, is the customer demand problem simply too intractable for Cisco to change its profile?Investors have reacted so strongly to the last two earnings reports because those questions still hover over Cisco stock. Cisco needs to give an answer to those questions for its shares to rebound. The Case for CSCOTo be sure, there's an interesting case that it's worth waiting for the answer. Cisco's dividend yields almost 3% at a time when the 10-year Treasury bond yields less than 2%. For those of us who lived through 2000 and 2008, it's difficult to think of a tech stock as "safe." But given Cisco's dominant position, it may well be safer than many old-line "blue chips."The one catch, even below $50, is that it's tough to see that case as compelling. Growth concerns are real. Valuation is attractive, but there is no shortage of fellow Dow Jones components at low forward multiples: Walgreens Boots Alliance (NASDAQ:WBA), Pfizer (NYSE:PFE) and even fellow tech titan Intel (NASDAQ:INTC). Those companies admittedly have their own challenges, but investors looking for "cheap" stocks have options.The issue at the moment is that Cisco still needs to prove that it's the best of that bunch, and thus at least deserves the modest valuation premium it currently receives. The company hasn't been able to do so over its last two quarters, and until it does, sideways trading will persist.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 'A'-Rated Stocks to Buy Under $10 * 7 High-Yield Dividend Stocks for Growth and Income in the 2020s * 7 Tech Stocks to Buy As the Trade War Ends The post Cisco Stock Needs a Catalyst to Thrive in 2020 and Beyond appeared first on InvestorPlace.
Advanced Micro Devices (NASDAQ:AMD) stock has provided investors with stellar returns of 154% in 2019. Even as AMD stock trades at a forward price to earnings ratio of 75.3, I believe that the rally is far from over.Source: Joseph GTK / Shutterstock.com Strong earnings growth and market share gain will continue to justify premium valuation and the positive trend will sustain. Therefore, AMD stock is worth holding through 2020.Earnings growth for 2020 is expected at 75.8% and this backs my point on valuations. In addition, earnings are likely to grow at a CAGR of 24.2% over the next five years. This is attractive as compared to industry level earnings growth expectation of 14.8%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBefore I talk about company-specific growth triggers, I want to add a note on the competition. Intel Corporation (NASDAQ:INTC) is clearly lagging behind Advanced Micro Devices. While the latter will experience strong earnings growth in the next five years, Intel's growth will be subdued. The company's CFO expects strong revenue growth and margin expansion in 2023. Importantly, 10nm node will be delayed and that will benefit AMD. * 6 Transportation Stocks That Are Going Places AMD has already been surging ahead of Intel. Data from Mindfactory indicates that the AMD stock price upside is being driven by fundamental factors. Data from Mindfactory is limited to Germany, but if we look at the broad x86 processors market share, AMD has made meaningful inroads. The company's market share has increased from 22.3% in 3Q17 to 31.2% in 3Q19. I believe that this positive trend is likely to sustain. Gross Margin Expansion Will ContinueAdvanced Micro Devices reported a gross margin of 40% for 3Q18. For 3Q19, gross margin expanded by 300 basis points to 43%. Further, AMD has guided for 44% gross margin in 4Q19.Margin expansion is another key factor that will take the stock higher in 2020. Ryzen and EPYC processor sales have triggered margin expansion. As AMD continues to gain market share through Ryzen and EPYC, gross margin and cash flows will grow.Importantly, EPYC processor sales will be robust in the coming years with cloud and 5G acting as growth triggers.International Business Machines (NYSE:IBM) and Nokia (NYSE:NOK) are using AMD EPYC processors for their cloud and 5G customers. There are other big names that have already adopted AMD second generation EPYC processors.Ryzen momentum will also sustain in 2020 with the launch of 7-nanometre accelerated processing unit. In addition, AMD also has 7nm mobile chips to be launched in 2020. With a strong pipeline of products, sales, gross margin and earnings will continue to improve.To back my view on continued sales momentum, AMD CPUs have outperformed those of Intel-based CPUs on performance test. This gives an edge to AMD in 2020 and beyond. The partnership with Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is likely to ensure that AMD maintains the advantage. Trade Deal Supports AMD Stock UpsideAMD stock was range-bound for a large part of 2019. It was in October that the stock had a convincing break-out above $30.The first reason for the sharp rally is growth in market share, margin expansion and robust sales from new launches.The second key reason for the rally is the gradual progress in the trade deal between the United States and China. With phase one of the trade deal done, there are hopes that de-escalating tensions will boost GDP growth.With AMD deriving 39% of 2018 sales from China (including Taiwan), the trade deal should have positive implications on earnings growth. Both the cloud and enterprise segment stand to benefit. Recently, Tencent (OTCMKTS:TCHEY) announced that it will use AMD's EPYC processor in its internally-designed server. As the trade deal progresses, I expect more contracts from China to boost AMD's growth. My Final Views on AMD StockAMD stock does look expensive from a PE valuation perspective. However, with strong expected earnings growth for 2020 and beyond, the rally might sustain with intermediate corrections.With more product launches in 2020, the markets will remain excited and there is no doubt that AMD has an edge over Intel.AMD is also positioned for growth in free cash flows as gross margin expands. This will further improve the balance sheet as net debt declines.Overall, AMD stock remains interesting for 2020 and any profit booking can be used to consider fresh exposure to the stock.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 6 Transportation Stocks That Are Going Places * 5 Bold Stock Market Predictions for 2020 * 3 Beer Stocks to Own Heading Into New Year 2020 The post Market Share Gains Will Keep Boosting AMD Stock appeared first on InvestorPlace.
With annual revenue of $26.6 billion, over 103,000 employees and a ranking of 466 on Fortune's Global 500 list, Nokia (NYSE:NOK) is considered to be the largest company in Finland. Sounds impressive, but it's a far cry from where the company stood at the start of the decade.Source: RistoH / Shutterstock.com The past 10 years have not been kind to the Finnish telecommunications giant, and its global standing has slipped significantly. However, with a big stake in 5G networking and the Nokia name once again appearing on smartphones and updated classic feature phones, will the 2020s be the decade of Nokia's big comeback? 2010s: Nokia Comes Out StrongNokia started 2010 as the global leader in the surging smartphone market. Fully one third of all smartphones sold in 2010 -- 33.1% of them -- were made by Nokia, and its sales of the decade's hottest devices were up over 48% on the year. The company shipped over 100 million smartphones to kick of the decade. In comparison, Apple (NASDAQ:AAPL) shipped 47.5 million iPhones and Samsung notched just 23 million.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Transportation Stocks That Are Going Places In 2010, Nokia sat at number 120 on the Fortune Global 500 list, with annual revenue of just under $57 billion. 2010s: Stumbling, BadlyWhat happened to cause Nokia to fall so hard from its position of smartphone dominance and the high global ranking it held in 2010? One word: Android. Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) Google was pushing Android, its mobile operating system, and consumers were clamoring for it. Smartphone vendors like Samsung were on board, but Nokia stubbornly refused, choosing instead to stick with Symbian to power its smartphones.That strategy was disastrous. And the solution wasn't any better. Still determined to avoid Android, in 2011, Nokia joined forces with Microsoft (NASDAQ:MSFT), adopting Windows for its Lumia smartphones. By 2012, with global smartphone sales at 1.6 billion units, Nokia's shipments had fallen to just 35 million units for a 5% global market share. In comparison, Apple shipped 135.8 million iPhones. Samsung shipped 213 million Android-powered Galaxy smartphones. By 2014, it was over. Nokia exited the smartphone business, selling it for $7.2 billion to Microsoft.From there, Nokia leaned heavily on its networking business, but there were other ventures. Notably, the company tried to wring some money out of Apple, launching patent lawsuits in 2016. The company won a one-time settlement from Apple as a result. Nokia used some of that cash to try entering the wearable health devices market, where Apple was making a splash with the Apple Watch. Nokia bought French health startup Withings for $191 million in 2016. In 2017 it took a $164 million write-down on the business. In 2018, it gave up, selling Withings back to its founder.As the decade wound to a close, Nokia's primary sources of revenue were networking equipment and patent licensing. Going Into 2020As we enter into a new decade, the company is looking to put the disastrous 2010s behind it. The company signed licensing deals with a Foxconn spinoff that has seen the return of the Nokia name on mobile phones. That includes a lineup of mid-range Android smartphones, and modern redesigns of classic Nokia feature phones including the 2720 flip phone. Nokia won't be seeing Apple level profits from this venture, but licensing fees at $11 to $23 per device will add up.The bigger story for Nokia as we enter the next decade is 5G. The company's networking division is rolling out end-to-end 5G solutions for telecoms, as they race to launch the next generation cellular network. With Chinese competitors like Huawei facing bans in many countries, Nokia is in a great position. In addition, the company stands to make money as part of the expected consumer surge to upgrade to 5G smartphones. Its 5G patents mean it will collect licensing fees of roughly $3.50 per smartphone sold.The past 10 years have seen Nokia battered, and it has become arguably the biggest casualty of the smartphone era. It goes into 2020 with its name once again on smartphones and retro feature phones, a strong patent portfolio, and a networking business poised to profit in a big way from the 5G rollout. Barring any major miscalculations, look for the Finnish company to once again begin climbing that Fortune Global 500 list.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 6 Transportation Stocks That Are Going Places * 5 Bold Stock Market Predictions for 2020 * 3 Beer Stocks to Own Heading Into New Year 2020 The post Nokia is Preparing to Come Roaring Back in the New Decade appeared first on InvestorPlace.
Fifth-generation — 5G — wireless technology deployment is underway, and many tech savvy consumers will soon be considering upgrades to smartphones that are 5G-compatible. Marcus Weldon, Nokia Oyj's (NYSE: NOK) chief technology officer, says 5G technology can solve the productivity paradox. “All dense urban areas, whether they’re cities, towns, whatever, will be heavily 5G-ised, because fibre already goes to those places and fibres can also be found typically throughout those places," Weldon says in an interview with the LSE Business Review.