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.
