from seeking alpha

I believe Nokia offers a lucrative long-term opportunity. I am a contrarian investor at heart. I tend to gravitate towards large-cap stocks that are confronted with pessimistic outlooks from most investors.

I posit the company is on the cusp of a turnaround. The stock is at an inflection point. The stock just successfully tested long-term support at the $3.00 level. See the chart below.

The stock has gone on a nice run as of late. This may be due to prescient investors seeing the light at the end of the tunnel. After a very rough 2012, the company is projecting a return to profitability in 2013. There are several factors impacting the bottom line.

• Transition to the windows phone platform -- Nokia should complete the transition from its legacy Symbian smartphone operating system to the Windows Phone platform very soon. This should vastly improve the customer experience and cut costs.
• • Introduction of Lumia 928 is driving sales-- Nokia has two new flagship phones. The Lumia 928 for the U.S. and the 925 for the rest of the worldThe Lumia 928 was recently released and available with Verizon. Check out this video of the phone . For all intents and purposes, it is the first true flagship Lumia to bear Big Red's branding. The 928 no longer has the smooth polycarbonate unibody of the 920. The shell is more hard-edged and angular, yet still plastic.
    • The success of the Lumia 925 will be the linchpin-- The Lumia 925 is expected out in June and sells for 469 euros. Unlike the 928, available in the U.S. only, this phone is setting its sights on the rest of the world. The Lumia 925 is Nokia's flagship phone for the rest of the world, most importantly Europe. With the eurozone seemingly pulling itself up by its boot straps, I posit the sales of the 925 will beat expectations, lifting the stock.
    • Expectations are extremely low-- The expectations for Nokia are extremely low. This is a key factor in my bullish thesis. It does not matter if the company has a gain or loss, it matters by how much it exceeds or misses expectations. With expectations set so low, I believe Nokia will have no problem besting estimates.
    • The stock is undervalued fundamentally-- Nokia has a price to book ratio of 1.39. The company has $3.62 in cash per share and book value per share is $2.68.