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Nokia: Getting #1 on the Cheap

The CEO of General Electric, Jack Welch, has built an empire by focusing on industry-leading companies. The same principle can be applied to stock picking.

Recently, Nokia - which is the #1 worldwide phone maker - has been selling at a much cheaper valuation. And, no doubt, Nokia will continue to be #1 for some time.

The recent fall-off in high-tech has definitely presented many investment opportunities and Nokia looks like a good one. As has been the case with most stocks, Nokia said there may be a slow-down in the third-quarter. Then again, the company's CEO, Jorma Ollila, also said that his company would increase its marketshare by several percentage points.

As for the company's second quarter, Nokia posted tremendous results. Earnings were at $1.3 billion, which was a 60% increase from the same period a year ago. Sales were $6.6 billion, which was a 55% increase. It's not often that you see a company of this size post such growth rates.

But the expected slowdown in the third quarter looks as if it will be temporary. Nokia has been shifting its product line. That is, there will be a slew of cool phones for users to buy at the end of the year. Expect lots of Net capabilities too. For example, Nokia struck a licensing deal with Palm, so as to use the Palm OS. What's more, Nokia is working hard to integrate the Wireless Application Protocol (WAP). It would not also be surprising to see exciting new announcements, such as with cutting-edge technologies like Bluetooth.

Nokia is a company steeped in history, going back to 1865. The company has a long-term vision and will take the necessary steps to continue to innovate. So, if you are a long-term investor and want to own a leader in a fast-growing industry, Nokia looks like a great choice.