Nokia Is a Quiet but Smart Bet on 5G Connectivity and More

You just never know which company the meme-stock crowd is going to target next for a short squeeze. Finnish technology company Nokia (NYSE:NOK) should be a good contender, as NOK stock is cheap and that’s a quality that Reddit traders seem to like.

a backdrop featuring the Nokia (NOK) logo with a mobile phone featuring the Nokia logo on its screen in the foreground
Source: rafapress / Shutterstock.com

During the past several months, however, it seems that Nokia has largely stayed under the radar. That’s not necessarily a bad thing, as value investors typically look for hidden opportunities.

Sitting around and waiting for the meme-stock crowd to send NOK stock on a moon shot probably won’t be a productive strategy. Instead, it’s better to conduct your due diligence on the company and consider a long-term position.

And as we’ll discover, Nokia’s been making significant deals lately – in the 5G niche, as you might expect, but also in an area you might not expect.

A Closer Look at NOK Stock

Okay, I’ll admit it. Reddit and Robinhood traders might have been responsible for January’s quick rally in NOK stock.

I call it the Eiffel Tower pattern: a rapid, vertical price pop, followed by an equally hasty drop. It’s a telltale sign that short squeezers may have been involved.

That run-up sent NOK stock to a 52-week high of $9.79, but pretty soon it was back to the pre-hype price of $3 and change. Easy come, easy go, as they say.

But just maybe, it’s possible that Nokia doesn’t need the assistance of the meme-sters. Imagine that!

In a gradual and much more sustainable ascent, NOK stock climbed towards $5 during the early summer. By July 9, it was nearly up to $5.50.

Now, that’s the type of sensible rally that I like to see in a stock. Plus, it’s reflective of the company’s growth, which has been impressive lately.

Let’s Make a Deal (or Two, or More)

So, let’s talk about that growth. Long gone are the days when Nokia was a collateral-damage victim of dot-com froth and failure; today, the company’s a card-carrying 5G innovator.

Check Nokia’s press releases page, and you’ll find so many deals that it might make your head spin. I wouldn’t even have room to cover them all here.

Here are a couple of value-added 5G-related deals, just to give you an appetizer so you can delve deeper if you’re so inclined.

First, in a collaboration with TPG Telecom, Nokia is launching the world’s first live 5G stand-alone, 700-megahertz service in Australia.

Reportedly, Nokia’s equipment will support 3G, 4G and 5G simultaneously across all of TPG Telecom’s low-band frequencies.

Next, let’s move over to Germany. There, a leading industrial robot manufacturer named KUKA (OTCMKTS:KUKAF) turned to Nokia for 5G private wireless networking.

This is a multi-year subscription contract in which Nokia will “support KUKA with network deployment, operation support services and training,” according to the press release.

And Now, Something Different

Don’t get the wrong idea here – not all of Nokia’s strategic partnerships are directly 5G-related.

I’ll give you an example right now. Recently, Nokia inked a patent licensing agreement with German automaker Daimler (OTCMKTS:DMLRY).

According to the agreement, Nokia will license mobile telecommunications technology to Daimler (in return for compensation, of course).

And there’s more good news here, as the parties have “agreed to settle all pending litigation between Daimler and Nokia.”

This includes a complaint made by Daimler against Nokia to the European Commission.

So there you have it: apparently, Nokia is in the business of licensing its mobile telecom tech to automotive giants now. I tell you, there are always new surprises with this company.

The Bottom Line

Flashy investments aren’t always the best ones. Sometimes, a quiet winner can provide you the best returns in the long run.

You might not hear a whole lot of buzz about NOK stock among the meme-stock crowd nowadays.

That should be perfectly fine with sensible investors who appreciate a solid growth story – and Nokia fits that description to a tee.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2021/07/nok-stock-is-a-quiet-but-smart-bet-on-5g-connectivity-and-more/.

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