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  • Alarm Bells at IBM? [View article]
    Debt/equity without taking into account the 738 million treasury shares distorts the ratio. Total debt to equity is closer to .4 after the correction. Looking at total liabilities (including pension) raises the ratio to 1.17; not great, but not horrible either. Certainly not bad enough to warrant the negative tone of the article.

    Cash flow at IBM is anything but a problem. The problem is what to do with cash. The company could pay off their entire debt with two years of cash flow. Add back depreciation and it would take even less time.

    Expect IBM to continue making acquisitions, buying back shares and increasing the dividend. Why would anyone want to short that.

    Disclosure: Long time (close to 20 years) long of IBM.
    Mar 16 09:17 am |Rating: 0 -1 |Link to Comment
  • Big Blue's Stock May Be Affected by IBM's 'Bank' [View article]
    Good article. As an IBM long, I appreciate your legwork to put the numbers in context.
    Oct 02 10:48 am |Rating: 0 0 |Link to Comment
  • Google, IBM and the Wall Street Funhouse [View article]
    shmo: IBM generates a ton of cash. With it, IBM pays a dividend, is an active acquirer, spends generously on R&D (see my earlier post), and buys back shares. Even when IBM borrows money for the buybacks, it makes sense so long as their earnings yield is above the borrowing rate. IBM is buying back shares because they are undervalued.

    Disclosure: Commenter has (and has had for a long time) a long position in IBM.
    Feb 27 21:22 pm |Rating: 0 0 |Link to Comment
  • Google, IBM and the Wall Street Funhouse [View article]
    Thomas: no worries my friend.
    Feb 27 15:56 pm |Rating: 0 0 |Link to Comment
  • Google, IBM and the Wall Street Funhouse [View article]
    RE: IBM R&D and Acquisition Spending. Yes, IBM's business has been doing well for the past few years. Arguably, IBM's R&D spending and acquisitions are among the many reasons for this performance. Here's some information on this area of IBM's business activity:

    - IBM spent the following on R&D over the last five years: 2003: $5.31b; 2004: $5.87b; 2005: $5.84b; 2006: $6.11b; 2007: $6.15b. This totals $29.28b, and represents roughly 38-40% of total cash flow from operations during this period. To put the annual amounts in perspective, IBM's 2007 R&D spending exceeds the individual market capitalizations of the bottom quartile companies in the S&P 500.

    Through 2007, IBM has led in U.S. patents for 15 consecutive years.

    IBM recently completed its largest acquisition, Cognos, for roughly $5b. For a list of IBM acquisition activity, check en.wikipedia.org/wiki/...

    Disclosure: Commenter has (and has had for a long time) a long position in IBM.
    Feb 27 12:22 pm |Rating: 0 0 |Link to Comment
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