Nokia Bulls Rampage While Bears Sharpen Claws

Kyle is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

My, my. How the worm doth turn.

So, on Sept. 5, I reported elsewhere that Wall St's pessimism was overdone, and that investors should hold their ground. On Oct 9, I upgraded Nokia (NYSE: NOK) to BUY, with a price target of $3.15. On Oct.12, I reiterated that position and tagged on a 12-month target of $4.15.

Nokia, of course, took off a week later.

Here We Go Again

I'm beginning to lose respect for analysts. Being that I am one, it's a disturbing trend. Is it just me, or does the simultaneous announcements of Raymond James' Tavis McCourt and Deutsche's Kai Korschelt come off as reputation ring-fencing?

Korschelt's data, for example, is based upon “weak” Google Trends data. This Search visualization to be precise:

Search Term: Lumia 920 [Google Trends]

<img src="/media/images/user_13882/googletrendsnokia_large.PNG" />

Which actually looks a whole lot like THIS Search visualization, in terms of relative global strengths and weaknesses.

Search Term: Galaxy III [Google Trends]

 

<img src="/media/images/user_13882/samsunggaliiimap_large.PNG" />

Truly, there are more sinister comparisons to be made using the same data point.

For example, when I compare search queries for both sets, the following correlation results:

Interest over time [Galaxy III in blue, Lumia 920 in Red]

 

<img src="/media/images/user_13882/lumiainred_large.PNG" />

But why limit ourselves to Search trend data? Why not, for example, compare Twitter mentions? It's an equally valid snapshot, even perhaps a preferential one.

Interest over time: Cannibalization of the iPad by the iPad Mini

 

<img src="/media/images/user_13882/ipadeatingeverything_large.PNG" />

Whoops! Wrong company. Oh, wait. According to this data point...ouch! Is that the iPad Mini cannibalizing Apple's (NASDAQ: AAPL) iPad 4 by search interest? YES. We'll take a long look at just how many sales the Mini is stealing from its older, more expensive sibling in another article.

Right now, our focus is Nokia.

Positive-Negative Sentiment Analysis/30 Days Period “Lumia”

<img src="/media/images/user_13882/twwtslumia-analysisi_large.PNG" />

Positive-Negative Sentiment Analysis/30 Days Period “Galaxy 3" 

 

 

<img src="/media/images/user_13882/twittersamsung2_large.PNG" />

All else being equal, this would appear to negate Korschelt's originally objection. The key is to use more than one traffic modeling tool. We could also take a snapshot of what people are talking about this very minute...

Lumia 920

 

<img src="/media/images/user_13882/twitterstats_1_large.PNG" />

Galaxy 3

<img src="/media/images/user_13882/galaxy3_large.PNG" />

 Hmm. Maybe spelled the other way?

<img src="/media/images/user_13882/gaaxytweet_large.PNG" />

Nope! Interest for the Lumia 920 is about par in terms of consumer interest, with a slight advantage for Samsung in the Northern Hemisphere.

Foolish Conclusion

I wrote this article as a response to one of my readers, who cited opinions that were, on the face of it, somewhat at odds with my current cautious position. For the record, I believe that Nokia will ultimately go to $5 and account for 5-10% of the mobile market.

Two things about that, though:

  1. Where. Is. The. Marketing? Nokia has the money to supplement AT&T's push, and yet I have yet to see a North American marketing campaign. Instead, Elop appears to have chosen the viral marketing route. Nokia's future depends heavily on the adoption of its Lumia technology, so why isn't Nokia's board putting all its chips on the table?

  2. In the absence of better communication from Nokia's HQ, investors are left without preliminary figures and are being forced to guess. End-of-year tax sell-offs may provide significant downward pressure to Nokia's stock. What Nokia investors need is a little more guidance from Nokia's PR department. It may be the declasse route in Europe; but here in the U.S., if you've got the numbers, BRAG. If management can't throw us a marketing campaign or a play-by-play of sales, then prudence would dictate at least the consideration of taking some money off the table and adopting a wait-and-see approach. 


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