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Buy IBM Now: Great Company, Great Chart 5 comments
about:IBM includes:BRK.B
First, some Overview for investors new to "Big Blue" International Business Machines (IBM):
IBM is a great American multinational technology company headquartered in Armonk, New York. Originally founded in 1911 as the Computing Tabulating Recording Company, IBM has grown into the global leader in the business hardware and software markets; offering companies products ranging from mainframes to consulting services and custom software. The company has spun off lower margin businesses such as Lexmark in 1991, and Thinkpad in 2005, to focus on the core business of higher margin "business software solutions". The result is a more profitable, innovative, and valuable company. Shares have gained 158% over the last 10 years.
Positives:
IBM is a valuable, great, and truly global brand. The company employs some of the smartest, most talented employees in the world. And always remember, companies are not made of shares they are made of people, and IBM has some of the best.
Below are some great facts about IBM for new and current shareholders:
-In 2012, IBM was ranked the #2 largest firm in terms of number of employees (433,362) by Fortune.
-The #1 company for leaders by Fortune.
-The #1 green company worldwide by Newsweek.
-The #2 most respected company by Barron's.
-The #5 most admired company by Fortune.
-The #2 best global brand by Interbrand.
-IBM holds more patents than any other U.S. based technology company.
-IBM employees have received five Nobel Prizes, and six Turing Awards.
Earnings Outlook, Dividend Growth:
IBM shares currently trade for $194.85, 14.1x earnings. The shares are projected to earn $15.12 in 2012, and $16.68 for their 2013 campaign; for a growth rate of +12.5%. And for many IBM investors the real story is the dividend growth (chart below). The dividend has increased from 75cents per quarter to 85cents this year alone; and the dividend has more than doubled in the last 5 years.
The earnings and dividend growth story has been confirmed by Berkshire Hathaway's (BRK.B) investment of more than 13B dollars into the company, Buffett's 3rd largest stake behind only Coca-Cola (KO) and Wells Fargo (WFC).
Inverse Head and Shoulders:
The chart below illustrates what is traditionally known as an "Inverse Head and Shoulders Pattern". The pattern is seen as very bullish in the trading community, but also as a great entry point for long-term IBM investors. Over the next 72 hours I will be a buyer of IBM shares for my father, looking for the stock to trade into the low $220 range over the next few months. The chart pattern breaks down around $188, so this is where I will set my stop order.
(click to enlarge)
Conclusion:
IBM is a mega-cap technology company with a market value of 222B, and a low beta of 0.66. This is a low risk, value-oriented investment; and the long-term growth story is in-tact. Last quarter, July 18th, the company reported an earnings beat of $3.51 per share, up from $3.09 per share in the year-earlier period. Also of interest, strong fundamentals have lead Barclays to upgrade the stock just this morning; moving the price target up from $208 to $240.
See also, IBM SEC Filings
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in IBM over the next 72 hours.
Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.
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This post has 5 comments:
I bought IBM on Monday & It has created a good profit in 2 days (about 5$ upmove) & that makes me look like a winner. But did I really move the IBM in last 72 hrs? (Answer is NO - it was moved by everyone except me. Then why should I take the credit or be given the credit for profit creation, by random IBM upward move????).
AND we got connected because of IBM & our profit creation goal.
BUT am I or anyone in the universe, really smart enough to duplicate this type of move on IBM or any stock, unless he/she is an insider. (Hint: Answer-No)
My results show that I have been very smart for > 1 yr, with 99% success rate. BUT that is called fooling myself.
My success streak will continue, UNTIL my time runs out like everyone else (unless one practices buy & old forever strategy).
But My Time will come with my results, to show that I am the most Stupid human on the planet.
Then again, I will change myself with a lot of hard work, from my end (provided my brain works), to become winner followed by waiting (without expecting or waiting in truth) to become a Loser again.
And life cycle will continue randomly exactly like random IBM movements (up or down or sideways).
FYI- I looked like genius on IBM Earnings trade, by creating >100% profit. BUT I was fooled by losing all the IBM Earnings profit in AAPL Earning trade (That too, because I broke my own created rule of not working with expensive stocks like AAPL. I deserved to be punished for breaking the rule).
In summary - We met randomly with IBM, like random market movement & may never meet again.
Good-Luck & Best wishes for everything (except hurting a weaker being/creature - old wise saying: what goes around, comes around but with vengeance)
Thanks a million for describing the profit creating, catalytic issues on $IBM from your wisdom filled words.
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