I added up today to an already old position in Nortel.
A good example of betting against the market...
- I think the stock went down enough during this whole month of August. But "telecoms don't sell subprime mortgages".
- I believe the telecom network build up is far from over especialy outside North America and Nortel is increasingly active abroad. Video on Demand is only starting up.
- They still have a big debt but they also have big cash. Debt minus cash is about one billion.
- They could be aquiring Tellab (read article).
- An insider bought shares for one million dollars above current prices.
- They made a big loss last quarter but this was partly due to one time items Previous quarter they made profit. Even if modest ones, they could turn profitable again soon as they revenues increase.
The risk is of course the market has not finished sliding and that some unpredictable bad news emerge but that's just obvious for every stock around here.