I’ve recently been looking to invest into some cell phone stocks. Three stocks that have caught my eye are Nokia, Motorola and Apple. All three make different and interesting products. From the general product review I believe Nokia makes a superior product, but keep in mind I’m not a techy (a techy opinion would be useful.) From my personal experience I believe that Motorola cell phones are rather crappy and the Apple Iphone is a very hipped up inferior product. (I would choose LG Prada over and Iphone any day.)
Now let’s look at the fundamentals, both Nokia and Apple have done very well recently while Motorola has been beat down. Most people would think that due to the recent pull back that Motorola would be a good buy; however that is not the case. Just looking at the most recent FWD P/Es you can see that MOT is trading at 27.5 times earning and is having a terrible year in terms of free cash flow generation and earnings. AAPL on the other hand is having a phenomenal year with significant increases in cash flow and earnings. The only drawback is the fact that AAPL is trading at 33 times forward earnings and the product is disliked internationally.
Now let’s look at NOK, the stock had a terrific year and returned around 80%. This is not as good as AAPL but still fantastic. Nokia has a solid balance sheet and a phenomenal management team as well as huge international exposure. It’s currently trading at 15 time forward earnings and has generated over 10 billion dollars of operating cash flow over the last 12 months.
To me NOK looks like a screaming buy and a stock that will outperform in 2008. The international exposure should help and lack of quality products from MOT and AAPL will boost sales for NOK.
Anyone else have an opinion?
January 9th, 2008 at 10:25 am
I would like to think of myself as a techy and I think that Nokia makes a far superior product compared to Apple and Motorola. I have had Motorola phones and they are nothing special and I’ve heard of many problems with many of them. Nokias phone have been know to be solid and work as supposed to. They are not as popular in the US because they don’t make many “cool” phones. All their phones are designed to work not generally designed to be cool.
Apple came out with their cool iphone and it was very popular with the hipsters these days but I’ve heard it does everything good except be a phone. That’s why they started to market the itouch, which is the iphone but no phone features. I would think that Apple’s second generation iphone will be much better, but like all apples products still have its flaws.
I am interested in googles phone: http://www.engadget.com/2007/01/18/the-google-switch-an-iphone-killer/
January 10th, 2008 at 2:39 pm
Did you buy NOK(Nokia)?
January 10th, 2008 at 2:55 pm
LOL if i did then I’m up 2.14% today.
January 18th, 2008 at 3:24 pm
NOkia kicks ass….. F.. Apple
July 21st, 2011 at 3:31 pm
How does this taste now Nokia boys? LMAO