Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has had a big run recently, much to the chagrin of some Tiger Cubs (see all funds shorting Nokia here). What is an investor to do? Cantor Fitzgerald Europe is out with a new report, which suggests buying some options. The analysts note that an investor can 1) Pay Euro 3.08 for the stock OR >2) Pay EUR 0.40 for the Sep 2013 3.20 Call and Sell the Sep 2013 4.40 Call at EUR 0.13 for a net cost of EUR 0.27 If the stock reaches the upper strike price then the return will be EUR 0.93 for a EUR 0.27 outlay (3.4x).
We summarize the background and potential catalysts for the idea below:
Jim Chanos At Invest For Kids: Short This Tech Company As Profits Slump
At this year's Invest For Kids conference, hedge fund manager Jim Chanos pitched a tech giant as his favorite short idea. Jim Chanos is a Wall Street legend. The president and founder of Kynikos Associates made his name shorting Enron in the 1990s. He has since identified some of the most profitable shorts in the Read More
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has rallied ~50% in the last 3 months and almost 100% from its one year low but lost almost 20% since it reported its FY results on 24th Jan 2013 which included a return to profit but a dividend suspension.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s share of the handset market was 19% in 2012, down from 32% in 2010 as they’ve lost out to the likes of Apple (N/C), Blackberry (N/C), LG (N/C), Sony (N/C) and Motorola (N/C).
The Lumia range which runs on a Windows platform has generally been well received.
Possible launch of a Microsoft compatible tablet at the Mobile World Congress (23rd- 28th Feb).
In talks to end its Nokia Siemens Networks (“NSN”) joint venture which could include a buyout of Siemens (N/C) with a new partner such as Alcatel-Lucent (N/C) or an IPO.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s NAVTEQ recently won the contract to supply navigation mapping systems to Toyota (N/C); last year Ford (N/C) chose Nokia (N/C) over Google (BUY – TP USD $900).
Cantor believes that income fund selling has abated.