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Nokia: A Finnish Favorite

09/22/2016 10:00 am EST


Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

In looking for our next investment opportunity, I’m especially impressed with the direction of this high-tech mobile telecommunications company based in Finland, suggests Mark Skousen, editor of High-Income Alert.

Nokia (NOK) is known for its mobile phones that lost out to competitors such as the iPhone from Apple (AAPL). Nokia’s smartphones were eventually bought by Microsoft (MSFT).

The stock price has never recovered, hitting an all-time high of $40 a share in 2007 and now trading between $5 and $6. But Nokia is far from dead, and it is still expanding and continues to pay dividends (5% a year).

The company is the largest customer of China Mobile (CHL) in China and is expanding into virtual reality programming and business cloud management, among other areas. It even plans to get back into the mobile phone business later this year.

It has strategic alliances with Intel (INTC) and Qualcomm (QCOM), and recently acquired the French telecommunications company Alcatel-Lucent (ALU.PA).

It is now focusing on future 5G technology that promises to deliver extreme mobile broadband and large-scale communications between machines to serve various industries and cities. Their 4.5G Pro and 4.9G technologies will deliver ten times the speed of initial 4G networks.

Revenues rose 91% in the past year to $20 billion, and it now has $12.65 billion in cash to expand, substantially larger than its $4.4 billion in long-term debt. Let’s add Nokia to our High-Income Alert portfolio and set a protective stop of $4.75 a share.

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