Now that Alcatel-Lucent is Gaining Profits, will it be Acquired (ALU, S, NOK)
Financial Times says Alcatel-Lucent is a Takeover or PE Target
Unlike other communications entities trading at small cap prices who used to be blue chips such as Sprint-Nextel (NYSE: S) and Nokia (NYSE: NOK), Alcatel-Lucent (NYSE: ALU) is profitable.
For the first time since Alcatel and Lucent merged in 2006, the company is in the black. Profits for 2011 were over $1 billion. As a result, Alcatel-Lucent is up more than 25% over the last week of trading. By contrast, during the past 52 weeks has fallen more than 50%.
In a recent article in the Financial Times, the present financial situation of Alcatel-Lucent was detailed. In the Financial Times piece, "Alcatel-Lucent," it was noted that, even with the recent rise in share price, the stock is still "at just one-sixth of their 2007 high." As such, the Financial Times article concluded that, if a business strategy is not developed that moves the company forward, Alcatel-Lucent "...will become a takeover or break-up target,"
Between Sprint-Nextel (S). Nokia Corporation (NOK) and Alcatel-Lucent, it is, by far the most attractive takeover target target or break-up candidate. It is actually making money. Earnings per share growth is positive.
The balance sheet of Alcatel-Lucent is particularly attractive. The price-to-book sales ratio is 0.23. The price-to-cash ratio is 1.02. From these, a buyer would purchase the company for basically the cash on-hand and at one-fifth the cost of annual sales.
What makes Alcatel-Lucent particularly attractive is its price-to-earnings growth ratio. Legenday investor Peter Lynch places a premium on this as it measures the cost of future earnings. A 1 is considered to be adequate. The price-to-earnings growth ratio of Alcatel-Lucent is 0.92.
The Great Recession has not been kind to Alcatel-Lucent (ALU), Sprint-Nextel (S) or Nokia Corporation (NOK). It is difficult for techs to recover. The example of Nortel stands before all investors. But, now that Alcatel-Lucent is making money with such enticing numbers on its balance sheet and income statement, a buyer could be attracted by the appealing assets and the brand name.
For the first time since Alcatel and Lucent merged in 2006, the company is in the black. Profits for 2011 were over $1 billion. As a result, Alcatel-Lucent is up more than 25% over the last week of trading. By contrast, during the past 52 weeks has fallen more than 50%.
In a recent article in the Financial Times, the present financial situation of Alcatel-Lucent was detailed. In the Financial Times piece, "Alcatel-Lucent," it was noted that, even with the recent rise in share price, the stock is still "at just one-sixth of their 2007 high." As such, the Financial Times article concluded that, if a business strategy is not developed that moves the company forward, Alcatel-Lucent "...will become a takeover or break-up target,"
Between Sprint-Nextel (S). Nokia Corporation (NOK) and Alcatel-Lucent, it is, by far the most attractive takeover target target or break-up candidate. It is actually making money. Earnings per share growth is positive.
The balance sheet of Alcatel-Lucent is particularly attractive. The price-to-book sales ratio is 0.23. The price-to-cash ratio is 1.02. From these, a buyer would purchase the company for basically the cash on-hand and at one-fifth the cost of annual sales.
What makes Alcatel-Lucent particularly attractive is its price-to-earnings growth ratio. Legenday investor Peter Lynch places a premium on this as it measures the cost of future earnings. A 1 is considered to be adequate. The price-to-earnings growth ratio of Alcatel-Lucent is 0.92.
The Great Recession has not been kind to Alcatel-Lucent (ALU), Sprint-Nextel (S) or Nokia Corporation (NOK). It is difficult for techs to recover. The example of Nortel stands before all investors. But, now that Alcatel-Lucent is making money with such enticing numbers on its balance sheet and income statement, a buyer could be attracted by the appealing assets and the brand name.
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| Date: | May 21, 2013 | |
| Price: | Free | |
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