We recently compiled a list of the 8 Best Large Cap Penny Stocks to Invest In. In this article, we are going to take a look at where Nokia Oyj (NYSE:NOK) stands against the other large cap penny stocks.
On February 4, Brian Jacobsen, the chief economist at Annex Wealth Management, joined a discussion on CNBC’s ‘Power Lunch’ to analyze the impact of tariff threats on markets and supply chains. He thinks that large-cap growth is the way to play tariffs. The conversation centered around whether markets are becoming desensitized to tariff talk or if they remain vulnerable due to the ongoing uncertainty. Jacobsen suggested that the truth lies somewhere in between. Markets might be somewhat inured to tariff discussions, but until these tariffs manifest in data, specifically that which affect profit margins, their full impact remains uncertain. He emphasized that investors face a catch-22: with elevated margins across large-cap stocks like those in the S&P 500, there’s concern about whether companies can pass on price increases without compressing profit margins.
Small-cap stocks are particularly vulnerable due to weaker profit margins and less ability to absorb increased costs from tariffs. Historically, during trade tensions like those seen from 2018 to 2019, large-cap growth stocks performed well because many received exclusions from tariffs. Jacobsen speculated that this might happen again if actual tariffs are imposed. For investors navigating this complex environment, he advised sticking to investment fundamentals and focusing on long-term valuations rather than short-term market fluctuations. He emphasized considering margin pressures and adjusting growth expectations accordingly while seeking a margin of safety for investments. So while markets may show some resilience against tariff threats due to past experiences with similar uncertainties, ongoing fears about potential tariffs continue to affect supply chains and investor strategies negatively. Investors should prioritize fundamental analysis over immediate market reactions when making decisions amidst such volatility.
Methodology
We sifted through the Finviz stock screener to compile a list of the top stocks trading between a market cap of $10 billion and $200 billion and at a share price of less than $5. We then selected the 8 penny stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Nokia Oyj (NYSE:NOK)
Number of Hedge Fund Holders: 16
Share Price as of February 14: $4.99
Market Cap as of February 14: $26.81 billion
Nokia Oyj (NYSE:NOK) provides mobile, fixed, and cloud network solutions globally. It operates through four segments: Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies. It offers products and services like fixed and IP networking solutions, optical and submarine networks, and mobile technology. It also provides cloud and network services, enterprise solutions, and licenses intellectual property.
Its Network Infrastructure segment drove significant growth in Q4 2024, with net sales up 17% year-over-year. All units contributed, but IP networks were the star performers and surged 24%. This was driven by improved trends among its service provider customers and increased demand in North America and India.
The company expects this momentum to continue into 2025, predicting strong growth for Network Infrastructure. On February 5, Nokia Oyj (NYSE:NOK) and StarHub announced the completion of a nationwide 10 Gbps fiber network rollout in Singapore. This network uses Nokia’s technology and makes StarHub the first operator globally with a fully software-based access network. To further capitalize on the Network Infrastructure segment, the company is investing more in its IP networks business, aiming for an additional €1 billion in sales by 2028, particularly in the data center market.
Overall NOK ranks 4th on our list of the best large cap penny stocks to invest in. While we acknowledge the potential of NOK as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NOK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
