A NOK 52 Week High ...
... was reached Friday at week close. Up 1 penny from its November 2005 52 week high and it almost poked above $17 intraday.
Nokia Gains Supported By Share Buybacks: Friday, May 06, 2005 [Dow Jones] Nokia (NOK) +3% at EUR13.17, and Ericsson (ERICY) +3.3% at SEK21.80. "We're seeing some switching into Nokia (NOK) and Ericsson (ERICY) today Nokia has broken previous highs at EUR12.99 and is well supported by the ongoing share buyback...it's the leading outperformer in the telco sector."
The chart for NOK is looking quite good:
stockcharts.com
Here's how NOK closed Friday on the New York Stock Exchange ...
NOK: Nokia Corporation (ADR) Friday, April 22. 2005
·
Closed $16.91 Opened $16.93
Change +$0.08 Previous Close $16.35
% Chang +0.48% Instit. Ownership 14.80%
Day's High $16.98 52 Week High $16.90
Day's Low $16.87 52 Week Low $10.89
Volume 8.58 Mil Avg Daily Volume 8.98 Mil
P/E 17.70 Market Cap $78.86 Bil
Dividend/Share $0.44 Current Div. Yield 2.60
Earnings/Share $0.95 Tot. Shares Out. 4.664 Bil¹
·
¹ Note: Shares were reduced to 4,434 Bil on Friday April 21
Wireless sector is looking somewhat more positive since Q1 earnings season started in mid-April after its 1st quarter swoon. All sector players I track (except IDCC) are up since that time, but the big winners have been Nokia and its strategic partner TI, the industry leader in wireless ICs for both GSM and UMTS (WCDMA).
CYTD 2005 Comparative Performance for Wireless and Wireless ICs
·
Friday Friday
April 15 May 06
========= ======
NOK -5.7% NOK +7.6%
TI -6.9% TI +7.3%
--- ERICY -1.0%
ARMHY -9.7% ARMHY -8.1%
ERICY -10.5% ---
--- MOT - 8.7%
------------------------------------------
Nasdaq -11.6% Nasdaq - 9.6% 1967.35
------------------------------------------
MOT -14.0% ---
QCOM -21.7% QCOM -15.9%
IDCC -24.4% IDCC -31.2%
LU -36.8% LU -31.6%
·
52 Week (1 Year) Comparative Performance for Wireless and Wireless ICs
·
NOK +19.5%
QCOM +11.3%
TI +5.3%
ERICY +9.6%
-----------------
S&P500 +5.2%
-----------------
ARMHY -7.0%
MOT -6.8%
·
PerfChart: Comparative Performance since July 23 2004 (Nasdaq at 1849)
stockcharts.com
My personal feeling is that wireless sector and tech in general will probably retreat somewhat as we head into summer and wireless stocks are likely to trade in a relatively narrow range tracking the Nasdaq Index in that period. Q2 Earnings and forward guidance will naturally have an influence on comparative performance within the sector.
Nokia gave what is generally considered to be relatively conservative guidance for Q2, and most analysts see potential upside. Their product refresh is progressing nicely and their Q2 performance against a comparatively poor Q2 2004 quarter when tactical price cuts were in effect should be quite good. The recent Amsterdam Nseries multimedia product launch was very well done, and the 3 EDGE UMTS (WEDGE) Series 60 Symbian smartphones built on Nokia's new terminal platform that were launched were very well received and gave many the impression that Nokia may have its design ZING back and somewhat dispelled sentiment that Nokia was not well positioned for the migration to 3G. We can probably look forward to at least one more splashy launch event before Q2 earnings featuring models that will ship in this calendar year and have an impact on the 4th quarter. NOK's dividend yield is highest in its sector, and the stock buyback and retirement is an added bonus for shareholders. They remain the largest and most profitable communications equipment manufacturer and their cash hoard is 2nd only to Cisco's.
I do believe that wireless sector sentiment will improve after the dog days of summer as we head into a record Q4 that will see increased migration to 3G and that Nokia could and should have a very good year, if general market conditions don't deteriorate. The odds of that happening are much improved over last year at this time. While I don't expect NOK to see the sunny side of $20 too soon, I do expect to see it this year.
Disclosure: My NOK reentry was made at $12.12 at mid-day of the day Q2 earnings were reported in July 2005. I also hold QCOM, TXN, ARMHY, LU, and LOUD, in my wireless basket. I consider QCOM and ARMHY to be core LT positions. I will make decisions early next year on NOK and TI as to whether I intend to hold some portion of each long, but at this juncture the probability of that is high. LU and LOUD are simply speculative medium term plays.
- Eric - |
