This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Will Nokia's Siemens Venture Buyout Spell Profits?

There were even discussions about splitting-off NSN into an initial public offering -- creating a separate entity. But the uncertainty is now over. And I believe that Nokia's decision just raised its profile. As much as I've beaten up management for past failures there is now cause for optimism, especially given the high margin capabilities of the network business. Nokia has a better path towards long-term profitability.

Investors have to rejoice that Nokia's long-term success doesn't have to be so heavily weighted on the device business, which is not getting any better in terms of market share. But I do applaud the company for turning devices into a profitable business -- growing gross margin by 70 basis points in the recent quarter and reversing last year's loss.

Plus, with carrier spending expected to rebound, Nokia's NSN, which is already a leader in LTE (long-term evolution) networks, is poised to capitalize on the recovery. Interestingly, though, in one decision Nokia has now justified its highly criticized cost-cutting measures. This deal probably would not have been possible without an improved cash-flow environment.

It still remains to be seen, though, what Nokia ultimately does with NSN. From an investment perspective, it's premature to speculate how much value NSN will bring to Nokia absent clear operating strategies by management. But no matter how you look at it, Nokia's prospects and value have just improved given the many options it now has at its disposal, including selling NSN.

In the meantime, though, I'm still not ready to jump into this stock. But I'm no longer convinced that it's an absolute sell, either. It's taken 21 months into his tenure as Nokia's CEO, but I believe Stephen Elop has finally earned my respect. It's a good day for Nokia's investors.

At the time of publication, the author was long AAPL.

Follow @saintssense

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $132.54 0.88%
ERIC $11.19 -1.41%
GOOG $540.11 -0.44%
NOK $7.22 -1.63%
MSFT $46.90 -1.10%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs