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Thursday 1 March 2012

Moving the Deck Chairs is Not Workng for Sprint-Nextel




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Moving the Deck Chairs is Not Workng for Sprint-Nextel, Nokia or Republic Airways (RJET, S, NOK)
Sprint-Nextel (NYSE: S), Nokia Corporation (NYSE: NOK) and Republic Airways Holdings (NASDAQ: RJET) are three small cap-priced stocks that investors should realize are pushing strategies that are just not working.

Nokia Corporation is doubling down with sales of the smartphones.  Sprint-Nextel continues to take on greater burdens.  Republic Airways has still not ridded itself of Frontier Airlines.  The stock for Republic Airways has risen based on the company's plans to sell or spin-off Frontier Airlines.  It is obvious that no one want to buy Frontier Airlines.  The spin-off had better please Wall Street or Republic Airways stock will be pounded.

The market over the past year has clearly told these companies that the strategies have not worked.  Over the last year, Nokia Corporation is down 33.87%.  Sprint-Nextel is down 41.65% over the last year.  Republic Airways is off by 15.93% over the same period.

These failures have not come cheaply, either.  The balance sheet of each company reflects the defeats of the market, particularly in the amount of debt held on each.  Republic Airways has a debt-to-equity ration of 4.04.  Sprint-Nextel has a debt-to-equity ratio of 1.77.  Nokia Corporation as a debt-to-equity ratio of 0.45.

Overall, the market is turning against each.  For Republic Airways, higher fuel costs will be devastating with such a burdensome debt load.  For Nokia Corporation, as detailed in a recent Wall Street Journal article, smartphone sales are not where they need to be for the company to survive.  For Sprint-Nextel, as detailed in a recent Financial Times article, the company "will be cash flow negative in 2012 and beyond..."


Raj Rajput  [  MBA ] 
Mobile Reviews Expert

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