Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares have been trading in a narrow range ever since the Finnish firm sold its devices division to Microsoft Corporation (NASDAQ:MSFT). Nokia shares are expected to eventually rise above the $8 mark, but before that can happen, investors need to become more sanguine about the future growth prospects of the company.
Nokia’s device patents and results from Nokia Solutions Network looks promising, which may push the share price higher in 2014, says a report from TheStreet written by Chris Lau of Kapitall.
At this year's inaugural London Quality Growth Investor conference, Denis Callioni, analyst and portfolio manager at European investment group Comgest, highlighted one of the top ideas of the Comgest Europe Growth Fund. According to the speaker, the team managing this fund focus on finding companies that have stainable growth trajectories with a proven track record Read More
Earlier, investors were largely confused regarding Nokia’s patents, which failed to garner a higher valuation for the company, but now since the company is free from its loss-making handset division, it can focus on monetizing its patent portfolio.
Recently, in Germany, an injunction was handed down against all HTC Corp (TPE:2498) phones running Google Inc’s (NASDAQ:GOOG) Android OS. As of now, either an NFC or Bluetooth connection between two HTC devices breaches patent number EP1148681.
The current shares price of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) do not fully reflect the valuable patents (over 30,000 patents and 10,000 innovations) Nokia has in its IP portfolio as investors are looking at things from a short-term perspective. The time period to monetize the IP assets could extend to several years. Taking the Microsoft Corporation (NASDAQ:MSFT)–AOL deal as an example, when the latter sold the patents to Microsoft, its shares rose substantially, and are continuing to rise two years later.
Acquisitions to boost revenues
Nokia recently acquired Siemens’ holding in Nokia Solutions Network, a division that has been posting positive numbers over the last few quarters, and look promising for further growth. The author believes that Nokia might make small acquisitions to enhance its competitive positioning.
The acquisitions would not only boost revenues, but would also force investors to reconsider Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) as a growth play. However, the author also cautions investors to not lose track of Microsoft as it takes full control of Nokia’s mobile devices.