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NOK..4 Technology Stocks Under $4 To Buy, 1 To Avoid

http://seekingalpha.com/article/516601-4-technology-stocks-under-4-to-buy-1-to-avoid?

Seeking Alpha - April 22, 2012 by: Chris Lau - includes: ALU, CLWR, NOK, S, THQI
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5) Nokia Corporation (NOK) - Speculative Buy

Nokia shares closed at $3.70, a price not seen since 1997. Shares are down 30.58% for the month, and down 7.96% for the week after the company reported earnings. Nokia launched the much-awaited Lumia 900 in the United States. The launch will prove to be successful. Verizon is also onboard a third ecosystem. The company's CFO tweeted that:

We created the Android platform from beginning … we are looking to do the same thing with a third ecosystem (Windows Phone).

The highlights from the Q1 conference call are:

- R&D support from Microsoft (MSFT) for Windows Phone will be $1 billion this year
- Sales expectations in the U.S. were met
- Q2 will be the first quarter where full sales for Lumia in major markets are included
- Company has EUR 4.9 billion in net cash
- OpEx dropped by EUR 700 million
- Gross margins for Lumia is 16%
- Lumia just started to arrive in stores in China
- Benefit of cash flow from Microsoft outweighs royalty payments

The negative points from the conference call are:

- Company faced challenges in establishing momentum in the United Kingdom
- Competition from Chinese manufacturers and from Android is putting pressure on pricing
- Sales for devices and services dropped 29% sequentially, and 40% year-over-year
- OpEx run rate for devices and services is still EUR 4.6 billion
- Nokia Siemens Networks is still a drag, with operating margins negative 5%

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in THQI, NOK over the next 72 hours.