Selling Phones to Emerging Market Consumers

16-Nov-2010

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A banker turned social entrepreneur. Liu-Yue is currently building and managing two social enterprises to help make the world a better place. Liu-Yue is the Co-founder, CEO, and Chief Investment Strategist at Oxstones Investment Club a global platform that helps facilitate the exchange of ideas on emerging alternative investment opportunities along the new Silk Road (emerging markets). Liu-Yue is also Co-founder and Chief Creative Problem Solver at Cute Brands, Inc. – Cute and Happy with a Cause! Cute Brands is a cause-oriented, character-based brand licensing and brand management company that supports select charities (WWF, WCS, and ASPCA) through consumerism. A NYC native, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group. Prior to M&T, he held a number of positions in emerging markets bonds and Latin American equities at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities and special situation investing at Steinberg Priest Capital Management (family office). Liu-Yue has a Bachelor of Science in Finance and Marketing from the Stern School of Business at NYU, and an MBA specializing in investment management and strategy from Georgetown University. He also completed graduate studies in international management at the University of Oxford, Trinity College.

By Liu-Yue (Louie) Lam, Co-Founder, Oxstone Capital Management,

Nok, Nokia – Finland, $10.21, 11/12/2010

Nokia is still the world’s largest cell phone maker. Its leading market share position (at 33%) helps it achieve economies of scale in low cost production through standardized features and equipment. The new CEO and additional senior management changes will seek to fuel new R&D to produce new products and better compete against Apple and RIM in the smart phone market.

Financially, Nokia is in good shape with positive net cash. It currently trades at the bottom of its 52 week price range and near multi-year (5+) lows. Nokia pays a very attractive bond-like yield of 3.8%, but with all the upside potential of a stock. Current valuation is reasonable at PEG Ratio of 1.31x and a forward P/E of 11.5x. Its standardized products allows for product efficiencies. With minimal capex requirement, Nokia is still a cash machine spinning off plenty of cash for increasing dividends or investing in new product opportunities.

Nokia remains a trusted brand name and has enormous opportunities to cater to the emerging market consumer markets across the globe. The long term structural weakness in the Euro will help spur increase sales through better competitive pricing.

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