Is Nokia (NYSE:NOK) stock still a buy near $6.50?

- May 30, 2017

Since NOK stock bottomed in November, BNL Finance has regularly called Nokia Oyi (ADR) (NYSE:NOK) one of the market’s best long-term investment opportunities. The combination of Nokia and Alcatel-Lucent creates the most diversified, complete telecom equipment company worldwide.

Prior to the merger, Nokia was a company that competed more so with Ericsson (NASDAQ:ERIC), and Alcatel-Lucent competed with Cisco Systems (NASDAQ:CSCO). Collectively with over $25 billion in annual revenue, Nokia and Alcatel-Lucent are still significantly smaller than Cisco Systems by total revenue. However, their collective technology creates an unprecedented advantage, which was first noted as a reason to own NOK stock.

Furthermore, Nokia and Alcatel-Lucent had established completely different regional areas of strength as independent companies. Both did well in the U.S. and Europe, but with different carriers due to Nokia’s partnership with Juniper. Alcatel-Lucent flourished in China whereas Nokia was able to penetrate India. After the merger was announced, Nokia did a phenomenal job at piggybacking Alcatel-Lucent’s presence with China’s three largest wireless service providers. Looking ahead, we believe Nokia will be able to do the same worldwide and in the U.S. as 5G CAPEX investments accelerate.

As seen above, Cisco is the 800 pound gorilla of the telecom equipment space. While Cisco Systems (NASDAQ:CSCO) has made big investments in security and services over the last few years, the overwhelming majority of its profits come from IP routing and switching. With a new spending cycle near in the U.S. telecom space, whether or not NOK stock continues to go higher will depend on whether it can capture market share from Cisco, specifically in the routing and switching space.

With the merger, Nokia now has partnerships with all four nationwide carriers. There is no guarantee Nokia (NYSE:NOK) will win large supplier contracts with all four carriers, but by offering end-to-end services, it certainly has a great shot.

Moreover, Alcatel-Lucent has steadily stolen market share from Cisco Systems (NASDAQ:CSCO) over the last 12 years. Its 7950 XRS IP router is the gold standard, and its investments in virtual routing coupled with Nokia’s infrastructure could lead to additional market share gains. At 18x forward earnings and a 3% dividend yield, it might be a bet worth making.

Is NOK stock still a good buy?

The rest of this content is exclusive to BNL Members only. (Unlock All Content & Much More)
  • Access all research reports, unlock hidden content, & follow stock coverage on more than 60 companies,
  • Know what stocks are being bought, sold, and held in the market beating BNL Portfolio, David's Dividend Portfolio, and Eddy's Options.
  • Get email notifications and mobile alerts the minute a trade is made. 
  • Join the fastest growing community of investors in the market, and engage with 100s of BNL Members in our Members Only section.

Learn More about BNL Membership and its no risk, no contract, guaranteed results policy!

Get our All Access Package for $85/month!

This entry was posted in Editor's Pick, HADE Platform, Members, Technology Bookmark the permalink.
RSS feed for this post. Post a comment or leave a trackback: Trackback URL.

Post a Comment

You must be logged in to post a comment.

Join the 100s Who Beat the Market with a BNL Membership

See What Current Members Are Saying

My Complete Access BNL Membership Includes

  • No contract. Guaranteed results. Cancel anytime.
  • Unrivaled Performance. The BNL Portfolio has outperformed the S&P 500 by 150% since October 1, 2015
  • Access. You know what goes in the BNL Portfolio, David’s Dividend Portfolio, and Eddy’s Options.
  • Alerts. You know when a trade is made in all three managed portfolios with application, text, and email alerts
  • Transparency. Verifiable trade records for the BNL Portfolio, David’s Dividends, & Eddy’s Options
  • Research. We have coverage on more than 50 companies
  • Results. Our 10 highest rated stocks outperformed the market by 134% last year
  • Live Chat. Join 100s of other members in an exclusive Members Only section with Chat
  • Growth. We are the fastest growing financial research platform in our industry.
  • Build My Portfolio. You give us your goals, we help you get there
  • Premium Content. Unlock hidden sections in each article. You also get Value of the Month selections and BNL Research Reports.
  • Community. We have professionals and beginners; retirees and college students; the 99% & 1%, but here, we are all equal.

Like what you see? Sign up for our newsletter and get the latest stock picks straight to your email!