I have just added Ericsson (ERIC) to my portfolio, which I have been wanting to do for a while now. This is part of my strategy to have exposure to the 5G industry growth potential.
I missed the dips in September and October last year, so was determined not to miss this one.
The dip has come about due to information coming from the earnings call. Although the Q4 results were inline it looks like concerns are being expressed about the higher than expected costs of 5G. Even with the extra cost coming I still believe the future is going to be good for Ericsson and this the price drop make it good value. I managed to get in at $7.91 and then the next day I couldn’t resist a bit more at $7.84. It bottomed out twice last year at around $7.64ish and then bounced back up. So there was potentially more downside and a slightly better entry point, but I’m happy at this.
There seems to be 3 key players in the 5G game from what I am reading. Ericsson, Nokia and Huawei. Huawei are under pressure due to the national security claims and it became clear that Nokia were lagging behind a bit and pulled their dividend payments to be able to reinvest more in the growth. (I own a small position in Nokia too – but I bought in prior to the big drop when they declared the dividend being pulled!).
Ericsson for me is a long term play – 5G is obviously going to be huge and the IOT (Internet of Things) is going to be part of everything we do – So I’m in and will continue to add when there is a dip and if funds are available.