After Motorola (MOT) threw in the towel on making money in cell phones this year, is it a good buy?

It was not three years ago. This analysis is still valid today.

In fact, Motorola’s failure is a big positive for Nokia (NOK) on many fronts: it shows that Nokia’s management can execute despite not having the “hottest” phone on the market.

Also, it will be further taking market share from Motorola: I estimate its margins will further improve, driving its earnings north of $2 a share over next couple years. The best part is it doesn’t have to do anything heroic to achieve that. Operational leverage (i.e. higher volumes spread over fixed costs) and a shift to a higher margin (i.e. more feature-rich phones) will do the work. I am not as enthusiastic about the stock as I was a year or two ago, but I still see some room for growth.

Disclosure: I own Nokia stock