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Monday, April 12, 2021

Nokia Stock: A Delight For Deep Value Investors

In a world where 5G is set to be the next big leap in internet technology, multiple technology firms are seeing their shares rising at incredible speeds; a feat that Nokia stocks have so far been unable to achieve. After briefly showing a $5.00 trade, the Nokia stocks are now being traded at an approximate amount of $3.50.

However, all is not well with Nokia stocks currently. Samsung Electronics recently won a whopping contract worth $6.65 billion to Verizon and will be providing them with wireless communications network equipment for five years. Meanwhile, 5G will be enabled in New York City via T-Mobile who will make the use of Telefonaktiebolaget LM Ericsson’s equipment, with Nokia’s equipment limited to be used on 4G networks.

Nokia Stock Reviving After Setbacks

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 These recent setbacks have arrived just as Nokia stocks were poised to rise. Nokia saw an increase in its cash flow in the last few quarters thanks to the renewed company policies set by Pekka Lundmark, their new CEO whose efforts have drawn praise. This came as good news to the Nokia stocks, since the previous CEO, Rajeev Suri, had received criticism for not cementing Nokia’s position firmly in the 5G race between tech companies. 

Despite the dip in Nokia stock prices, the company has more than enough opportunities to delve into the large 5G market worldwide. Taking these facts into account, investors should consider buying Nokia stocks because of their low prices currently. Nokia remains a valued company even till this date, and the recent Covid-19 pandemic has proved useful for the rise of 5G, and with it, the lagging fortunes of Nokia. 

With the rise of the pandemic, nearly half of the U.S workforce has been working remotely. It is believed that most of the workers wish to continue doing so even when the situation of a pandemic comes to an end. This coupled with the fact that there has been a massive increase in the amount of streaming by the consumers due to the closure of movie theatres and concerts, it is expected that carriers will need better and more bandwidth in order to meet the excess demand. This comes as a relief to 5G infrastructure whose growth was initially stalled due to the pandemic. 

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While it is certainly a fact that Nokia has lost several key contracts, the firm has also however won many others, especially in its home market, Europe. Nokia is currently selling 5G equipment to Spanish Carrier Telefonica and France’s Orange. In parallel, the company is also responsible for building an optical network for China’s State Grid Crop.

Nokia Stock Loss

Despite Nokia’s success in Europe and China, Samsung’s upper hand in the US will no doubt hurt its ambitions. However, Verizon has not completely given up on its partnership with Nokia and is collaborating with them and Microsoft to build 5G networks that are private for its clients. Nokia’s benefit in this collaboration comes from the fact that Verizon will use Nokia’s overseas dominant presence to build private networks for manufacturers in those locations. 

With Nokia stocks trading at a 12.30 PE ratio currently, Nokia stocks at their present prices are an absolute steal for the value-conscious investor. Considering Nokia’s strong presence in the 5G markets, their share prices are expected to reach $5 in the next few quarters, making Nokia stocks a deep-value investor’s ideal investment. 

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