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Technology Stocks : Nokia Corp. (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (4646)	3/4/2007 2:17:08 PM
From: sisuman	Respond to of 9255

MARCH MADNESS - NUMBERS SPECULATION Eric, thanks for all the good numbers from Gartner and Strategy Analytics. I thought I'd put together some of my own, highly speculative numbers regarding Nokia 2007 prospects. 1. For any O'Neil and IBD followers, Nokia's 3 year weekly performance chart now looks like a "cup with handle" formation. The cup has formed over a desirable long period of the past 9 months. A typical handle formation, according to O'Neil, then is a drop of about 8 to 10% - which would mean a drop to a price of $21.00 to $21.40, then a solid rise would we expected. 'Course we're already at the handle bottom at Nokia's current price of about $21.15. 2. But we're also into a significant market correction. The NASDAQ has risen about 520 points over the past 7 months from a high of 2531. A potential drop of 50% of that gain is down to the 2260/2270 level. Nokia generally drops more during a market correction. Nokia has risen from about $18.80 to $23.30, a rise of $4.50. A 70% correction from that rise would take it down to about $20.15; a 50% drop, down to $21.05. The ongoing market correction, compared to previous such corrections should last about 2-1/2 to 3 months, into May. Could Nokia help lead a turnaround from this correction with a strong earnings report on April 19? 3. Regarding Q1 earnings expectations, analysts are currently forecasting earnings be $0.32. Gartner estimates that Q1 industry sales will be 268 units. If Nokia maintains its 36.2% market share, it will sell about 97 million units, 6% less than Q4/'06. Nokia earned $.39 in Q4, so a drop of 6% would imply Q1 earnings of about %0.36, $.04 than analyst's guesses. If Nokia can also raise its operating margin - Q1 op'g margin is usually higher than the holiday margin; and Nokia is beginning a new product cycle - going to 13.5% op'g margin would give $0.37 earnings; 14% op'g margin yields earnings around $0.39. Beating Q1 earnings by $.04 or more should raise full year earnings estimates to the vicinity of $1.60 from current $1.49 estimates. P/E's of 16 to 20 - take your guess - would yield year-end prices of $25.60 to $32.00. A Nokia price between $20 and $21 looks like a good buy point. All this madness without smoking anything, though a glass of a nice Merlot helped. Sisuman