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HMD Global today unveiled its latest smartphone, the HMD Fusion, an affordable device whose idea is to change functions and style with a shell. This is how the HMD Fusion will initially be distributed, but additional devices will be available later this year.
Nokia Oyj is among the worst affordable stocks
27. 09. 2024 Friday / By: Robert Denes / Business / Exact time: BST / Print this page
N okia Oyj (NYSE:NOK) is facing challenges in terms of market weakness. As a result, net sales in the second quarter of 2024 fell by 18%, adjusted for exchange rate effects. India was one of the main contributors to the decline. Although it trades at a discounted forward P/E of 11 and earnings are expected to grow 19.40% for the year, the stock remains one of the worst affordable stocks under $10.
While it's true that the company's glory days of dominance as a preeminent hardware maker are history, management is making efforts to strengthen its network infrastructure business. To this end, the company announced the sale of the ASN business and indicated its intention to purchase Infinera. Nokia Oyj ( NYSE:NOK ) is currently undergoing an ongoing cost-savings overhaul, and management reiterated its 2026 target of 800-1,200 million euros ($893.64 million to $1,340.46 million).
On a positive note, the order book in the second quarter improved significantly, which indicates an improvement in the second half of the year. Thanks to improved order intake during the quarter and free cash flow of $450 million, management left its full-year forecast unchanged.
Nokia Oyj (NYSE:NOK) was held by 18 hedge funds with a total value of $418.70M in 2024Q2. Pzena Investment Management is the company's largest shareholder, with a position worth more than $311.9 million.
Nokia Oyj is the world's third-largest provider of telecommunications equipment. The company sells its products to carriers such as AT&T and Vodaphone. While we held the shares, new management improved competitiveness and reduced costs at the same time - this is a remarkable achievement that has resulted in better growth and profitability.
Even so, the share price has declined and the valuation multiple has shrunk below 10 times forward earnings. The reason for this is that telecom operators are reducing their investments. Higher interest rates, inflation, and competition eat away at customers' cash flow, resulting in less capital spending. For now, Nokia's demand will decline.
At some point, the ever-increasing demand for wired and wireless bandwidth will force service providers to increase their investments. In addition, Nokia's market share is improving due to geopolitical changes and improved market competitiveness. The share price fell by 15% during the quarter."
Overall, NOK ranks 4th on the list of worst affordable stocks under $10.
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