Nokia (NOK) is stuck in a wide trading range. Markets are not convinced that the struggling communications equipment will achieve growth. After markets closed on Thursday, the firm announced it would acquire Infinera (INFA) for $2.3 billion.
Look at INFA stock’s long-term chart. The downward trajectory suggests that acquiring it to expand its optical business will not pay off. It will struggle to compete with Ciena (CIEN).
Nokia will pay a 26.4% premium to Infinera shareholders. It will pay Infinera a minimum of 70% in cash.
CVS Health (CVS) fell below $60 after its competitor, Walgreens (WBA), posted disastrous sales in the quarter. Expect CVS stock to bounce back. It offers deep value at a 7.72 times price-to-earnings ratio (non-GAAP). The sector median is almost 19 times earnings.
CVS will benefit from Walgreens closing up to 25% of its stores. It will face less competition. CVS stock pays a dividend that yields 4.39%.
In the oil sector, investors who did not build a position in Exxon (XOM) will miss out on the recent rising prices. Geopolitical tensions will more than offset a rise in crude and gasoline inventories. Investors may consider ETFs including USO, UCO, and SCO.
