We recently highlighted Nokia (NOK) as a company which could benefit from the Windows 8 launch. But there is more to the Nokia story. Share price was up 12.2% on Wednesday, and 7.5% on Black Friday, before pulling back early this week. Rumors around Wall Street attribute the rally to strong Lumia sales in Germany. My investment thesis for Nokia is complicated, but can be broken down into four main points. 1) Margin of Safety: Nokia’s impressive patent portfolio serves as a steady revenue source and significantly increases the liquidation value of the company, insuring shareholders against loss of capital due to share price depreciation. 2) Core Competencies: Nokia’s Mapping Technology segment and their Siemen’s Global Network segment show solid growth in profitability. 3) Emerging Markets: Nokia’s presence in emerging markets is growing through their feature phone line, Asha, which is especially popular in India and China. 4) Lumia/Windows Phone 8: Nokia has long been a niche player in the international smart phone market, but early sales seem to indicate aggressive pricing and innovative design of the Lumia 920 coupled with the long-awaited Windows Phone 8 mobile operating system will return Nokia to relevancy and profitability in the mobile phone market. This return to profitability in their Mobile Phone Segment, coupled with the cost reductions in recent years, and the other factors previously mentioned, should return Nokia to profitability and cause the stock to appreciate significantly over the next year. Nokia stock performance (last 30 days) Margin of Safety: Value Investors have always looked to invest in companies which possess a “Margin of Safety”, essentially a margin of safety is when for some reason the market price of a stock, is significantly below the intrinsic value of a company. This term explicitly differentiates between the price and value of a company. The price of a company refers to the current price shares are trading for on the stock market. The value of the company refers to the worth of the company as determined by one or more of various valuation methods. Nokia possesses this coveted margin of safety in the form of their patent portfolio.