Nokia (NYSE:NOK) fell after disclosing that its Alcatel-Lucent unit had compliance issues. On Mar. 22, the stock fell 8%, a selloff that appears overdone. The company’s fundamentals are sound and the company is dealing with the accounting issues.
Income investors picking up the stock after the drop will collect a dividend of around 4%. And as Huawei’s troubles mount, led by the U.S. wariness for its trustworthiness, Nokia could win more 5G and LTE contracts.
Special Investigation Immaterial
Nokia responded to market rumors by clarifying that its investigation will not have a material impact. It has seen no evidence that suggests criminal penalties apply. The firm detailed what it meant in ensuring complete compliance. It is now scrutinizing certain transactions in the former Alcatel-Lucent business.
The maximum cost related to the compliance will be no more than EUR 125 million. That the market cap dropped in the billions appears overdone.
Nokia stock is trading in an upward trend that previously was not disturbed. If management is quick in resolving the compliance issue, investors who buy the stock at below the $6.00 level may get rewarded in the long-term. The ramp up in building 5G worldwide will boost
Nokia’s revenue growth starting this year.
Disclosure: I own shares of Nokia
