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Wednesday, 5 September 2012

Nokia Shares


On the 17 January this year (2012) I tipped the shares of Cable & Wireless Worldwide (CWW), when they were around 16 pence.  A few days later they jumped nearly 50%. I have to say that I didn’t believe they would go up quite that fast but they kept going up and up until …the company was bought by Vodafone at 38p per share! It gave me the kind of profit I like – a three digit percentage point gain.

Another share I have in my portfolio is Nokia. ‘But nobody buys a Nokia anymore’, I hear you say  - and their stock dropped faster, further, than even that of CWW over the last few years. 

But let me outline why I think Nokia shares are a good bet for capital growth:
  • Their new ex-Microsoft Chairman and CEO, Stephen Elop, told it like it is (or was!) with his “Burning Platform” company internal memo – an announcement, much cited and referenced as a guide for other business and political leaders such as Cisco’s John Chambers. A solid basis for a good turnaround story.
  • Nokia still has a solid customer base outside the United States – especially in Africa
  • Connected with Elop’s former former employer (one imagines!) is Elop’s new strategy for Nokia, which, very simply is “Get into bed with Microsoft”.  Nokia shifted its smartphone operating system from Symbian to Microsoft’s Windows Phone 7. ZDnet described Windows Phone 7 as ‘the most stable mobile phones operating system’.
  • Now – and launching TODAY (Sept 5 2012) in New York - we will see the culmination of a few years hard work and close collaboration when Nokia and Microsoft launch the new Nokia phones running the new Windows Phone 8 OS. I expect it to be an impressive event.
Out with the old...

With Microsoft’s marketing muscle, nous, and experience - and given that Microsoft is none too keen on getting into bed with Apple or Google, I expect to see Nokia’s new smart phones re-carving out their niche in the mobile market. Let’s also not forget that Microsoft always get it right – eventually!

The launch, and the techie bits are well covered by the BBC here in which Malik Saadi of Informa emphasises the salient point of Nokia’s impressive patent library. Somehow, I don’t think it will be worth Apple’s while to go after Nokia in the courts.

Watch Nokia’s space, as they say. Just remember I bought my chunk of stock at $2.55

I suppose I had better give you that guff about ‘shares can go up as well as down’ and ‘do not invest more than you can afford’ etc. etc.

Anyways, Nokia stock resides in my portfolio – and I have a few other pearls that I might tell you about at a later date.

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