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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (38489)	7/14/2010 4:58:59 PM
From: E_K_S	Read Replies (2) of 78750

Hi Jurgis RE: Nokia Corporation (NOK) Motorola, Inc. Common Stock (NYSE: MOT) I am hunting for value in both of these companies (I own positions in both). There was some rumblings that NOK may be interested in all or parts of MOT, specifically their infrastructure division (The non mobile component). The idea is to see if they can buy it on the cheap (NOK has plenty of cash) and consolidate the company with their Siemens AG (SI) JV into some new holding company. They would need to sell off the cable "smart box" unit as NOK has no interest in this line of business. Ichan a large holder of MOT shares will probably demand too high a price for the non mobile component to make the deal work but if he backs the proposal it could be a winner for all parties. Here was a 2009 valuation of the pieces analysis for MOT that Morgan Keegan & Co. wrote. According to the article, they have MOT valued between $9.00/share excluding Mobile Devises. The Mobile Devise Division is worth $0-$5.00/share in 2-3 years. This was before the Android smart phone was such a big hit. At the bottom of page 12 of the report I saw this statement regarding the industry outlook for 2010. *"... in 2010 NOK will likely sell about 60-70 million smartphones, RIM about 40 million, Apple about 30 million, HTC about 10 million, Palm about 7 million..."*. morgankeegan.com Both HTC and MOT are having trouble delivering on their smartphone orders. I guess this is a good problem to have but industry insiders say that the market is so fluid that customers will not necessarily come back to buy your phone if it is not in stock. MOT traded almost 2x it's average volume today. Frankly I believe NOK to be the better long term value play but MOT seems to be getting the better buying volume. I am not too sure what to do, but I want to eventually consolidate my holdings into NOK. If NOK falls on a MOT buy out offer (or partial company buy out), I will feel better and sell my MOT and put it into NOK. Still just sitting on both positions but feel better about my MOT after reading the Morgan Keegan & Co. valuation paper. EKS

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