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Ticker Shock: Three Reasons to Keep Nokia on Hold


Monday's top stories and stocks with potential to move.

Anyone see the movie Office Space? I've seen it maybe a half dozen times over the years and I tell you -- it gets funnier every time. If you work 9 to 5 or in an office, check out this film.

Asian stocks rose overnight. The Hang Seng and the Nikkei were up 1.67% and 3.35%, respectively. European stocks were a smidge higher earlier this morning as well. And here in the US, we're currently trading higher.

Here's what I'm seeing this fine Monday morning:

Nokia (NOK):
Deutsche Bank dropped its rating on the stock like I dropped third-period French. It went from Buy to Hold.

Deutsche's move doesn't have that much of an impact on my thinking. I'm not too crazy about this company for a few reasons:

1. The stock is just a little bit rich, trading at 16 times this year's estimate.

2. I'm noticing that the estimates have been coming down over the last couple of months, and that's a turn-off, too.

3. In order for me to dial in a buy order, I'd want to see the stock in the single digits. Alternatively, I'd like some hard evidence that the current 2010 estimate is very doable.

Advanced Micro Devices (AMD):
My fellow Minyan Justin Sharon points out that Citi upgraded Intel's (INTC) number-one nemesis from Hold to Buy.

My thoughts:

1. A bump up from Citi could cause the stock to show some signs of life in today's session. But I'm not all that excited about this news, and I don't believe it's a better play than Intel.

2. Besides chips, look at all the losses the Street expects it to make. Additionally, with the stock trading at less than the price of a value meal at McDonald's (MCD), why aren't insiders dropping lots of coin on it?

The Children's Place (PLCE):
On Friday, it was reported that a Citi analyst bumped up her rating from Hold to Buy.

Some thoughts:

1. Back In July, I was hip on the stock. But now, not as much. It's had a pretty nice run from the mid $20s. Plus, I'm looking at the estimate trends and noticing the estimates have been coming down for this year and next, which irks me a bit.

2. I'm more than a little concerned about the competitive pressures the company could see from discounters -- particularly if the recession lasts longer than we thought. Think Target (TGT) and Wal-Mart (WMT).

If the stock gets a little goose on the heels of this news, I'd rather use such an opportunity to bail.

Cheesecake Factory
At one time, this company was on fire. But the cult-like following seems to have died down a tad.

That said, just a few thoughts on the company, given the news that Piper Jaffray jacked up its rating from Underweight to Neutral.

1. The stock isn't very cheap at 18.4 times the 2010 estimate. At the same time, I'm a bit intrigued. If it makes a new high, many people will take note and might jump on the bandwagon.

2. It's not a ton of dough, but an insider apparently bought 1,000 shares in July. That's certainly nice to see -- near the highs.

3. Estimates for this year and next have been on the rise over the last couple of months.

And one final side note: Nobody seems to be taking Radio Shack (RSH) seriously. But check out this news about its buyback program. It sure seems like a good sign.

Have a great day!
No positions in stocks mentioned.

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