Nokia on the come back?

Have you paid any attention recently to Nokia? Once the King of cell phones, they have fallen from grace in the eyes of many for losing the flip phone battle to the Korean manufacturers such as Samsung and LG.

I believe it was in January 2004 when Nokia announced in a press release that they were forecasting continued growth. Their share price in New York spiked into the $20 range. At the time, I was noticing around me the growing number of Korean flip phones offered in the market and how all the hip teenagers carried a Samsung with fancy face plates and bright flashing LEDs. I could not recall any new Nokia phones coming out or any friends owning a new Nokia phone. I could not understand how Nokia was backing their claims.

I thought, Nokia must be doing well in Europe. After all, Europeans tend to be protective of their brands and support them patriotically. Plus, I've made some good money on Nokia before so I should not doubt them. With that rationale, I loaded up on some shares at around $19 a share.

April 2004 came around quickly and Nokia suddenly issued an earnings warning and that they were losing market share! The stock was hit hard. What a scam I thought! How could they suddenly warn after making a growth forecast just 3 months earlier. I took the loss and learned a valuable lesson for myself- which was to notice the trends around me and invest accordingly. Nothing could be more accurate sometimes.

My point of this post was not just to tell you about what happened last year, but also to share some of my thoughts about Nokia and why it may be a good buy at this point.

• Nokia is a recognized and trusted brand name. They may have missed out on the flip phone war in the last two years but it's not rocket science to make them. They can catch back up easily with a few new offerings. They already have many new phones in the pipeline.
  
• They are a solid company with solid earnings and low price to earnings ratio and low price to book ratio
• They are determined to be great again after being slapped in the face by their complacency when at the top of the mountain

Nokia has bounced back from a low of $10.89 to the current $15.97 and I've made back some of my losses. I think there is still more upside for this stock.

Stay tuned for some of my thoughts on the other giant named Motorola, the inventor of the original Star Tac flip phone.