Thursday, December 06, 2012

Nokia- the recovery may begin?


Those days when Nokia communicator was a hot gadget are long gone. And, Nokia and its share price continue to welter and shrink. Nokia, once traded at USD60 apiece in 2000, was recently traded at less than USD2.00. All this thanks to the arrival of Apple Iphones and the army of Android phones.

However, all is not lost for Nokia. In Feb. 2011, Microsoft Corp. and Nokia Oyj paired up, with the goal of making the mobile market more of a “three-horse race” and to turn Microsoft’s Windows Phone operating system into a “challenger” to Apple’s iPhone and iOS software and phones powered by Google’s Android OS. The latest line of smartphone from Nokia which run on Windows Phone 8 received good review.


Chartwise, Nokia has broken above its 200-day SMA line three weeks ago. Yesterday, the stock broke above its recent high. This could be the beginning of the recovery for Nokia.


Chart 1: Nokia's daily chart as at Dec 5, 2012 (Source: Stockcharts)


Chart 2: Nokia's weekly chart as at Dec 5, 2012 (Source: Stockcharts)

7 comments:

hng said...

Hi Alex

About SP setia, i think its upcoming Q4 result should be able to give investor more insight about its prospect such as target sale of 4b is meet, total unbilled sale that will ensure earning visibility in next 2-3 year and detail about its recent land acquisition in Amapng, Bangsar and kajang as well as its maiden venture in UK, the biggest venture so far, Battersea, GDV RM 40b

Thang Guan Chung said...

Hi alex,

May I know what is ur view on Puncak after it released the 3rd quarter result? Is it still a good counter to keep & wait for the election?

Thx.
Rgds,
GC

hng said...

Hi Alex

About SP setia, i think it fail to rebound probably due to upcoming private placement issue. These round of private placement entitle investor to up to 10% discount based on 5 day average price.

It could be main reason the selldown on SP setia has never stop as fund manager will press down current price severely in order to subscribe discount share from private placement

Based on current SP setia price of 3.02, its wb already at high risk. If the private placement of 15% issue at 2.80 (7% discount), its WB may at risk worth nothing due to high conversion price of 2.99 and short lifespan of less than 1 month

hng said...

Hi Alex


For your information, SP setia in its circular (page 12) to shareholder state that the ongoing private placement pursuant to the term and condition of the Deed Poll, may resulted adjustment to the exercise price of the warrant.

I assume that if private placement price is lower than its current warrant exercise price (RM 2.99), the adjustment will be carry out on exercise price in order to match private placement price.

As the private placement price subject to 5 days average price of SP setia and given up to 10% discount. Lets assuming private placement issue at 7% discount based on 5 day average price of RM 3.02, the placement will be issue at 2.80 and if adjustment did materialize according to Deed and Poll, then warrant exercise price will be adjust lower from 2.99 to 2.80 and current SP setia WB will potential have intrinsic value of 20sen if SP setia stay at 3.00

Alex Lu said...

Hi Thang Guan Chung

Puncak's latest result is very good. It is so good that it is unreal. 9-month EPS was 55 sen. Annualized EPS would be 73 sen. At that earning, Puncak (at RM1.28) is trading at a PE of 1.8 times.

Why is the market not buying into the stock? It must be having serious doubt that BN can take back Selangor in the next general election.

Stanley said...

Hi Alex, assuming PKR retained their seat, the percentage of dropping would be minimal as everything has been priced in. If BN took over, the gain would've tremendous. I would reckon that this is a good risk to take.

Cheers

Alex Lu said...

Hi Stanley

If PKR remains in power, Puncak will have to sell off the water assets at the price offered by the state government. What would Rozali do with the cash? Use it for the new O&G venture? Distribute it to shareholders? One thing you can be sure, he will think of himself first and last.

Despite that I do agree with your thinking that the downside is limited for Puncak but the upside can be quite significant.