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Why IBM (yes, IBM) may be the best Dow stock for 2014: Strategist

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It has declining revenues and it is the only Dow stock down in 2013. So, why does one strategist like as investment in 2014?

The Dow Jones Industrial Average is up 25% year-to-date. But, not all the stocks in the index are having a great year.

Five stocks components are lagging the index by at least 10% -- Coca-Cola, McDonald's, AT&T, Caterpillar, and IBM. In fact, IBM is the one stock in the Dow that is down in 2013.

However, one strategist believes IBM is the stock to watch in 2014. CNBC contributor Gina Sanchez, founder of Chantico Global, thinks IBM has a few things going for it.

(Watch: Herb's 'could have been' worst CEO list)

"A lot of people look at IBM and they think it's an old, mature stock; it's 'Big Blue'," says Sanchez, referring to the company's nickname. "Obviously, last year wasn't a great year for IBM. But, they have a consistent track record of being profitable. They have been growing their margins. They have a stellar buyback program that they have actually announced an increase to. And, they're rolling out their AI [artificial intelligence] platform, Watson, which is sort of an interesting catalyst for 2014."

Sanchez brushes aside recent downgrades to the stock by analysts concerned about the company's declining revenues. Its top line numbers have been falling since 2011, when it was $106.9 billion. Over the last four reported quarters, the company's revenues were $101.4 billion.

"Only two revenue segments out of the seven really fell last year," says Sanchez. "I think that they're really poised to really grow revenues and they're extremely cheap right now."

Sanchez believes the stock's price to earnings ratio relative to the industry average indicates a buying opportunity.

"If you look at them, they're in the 12 times range versus an industry average for their segment of about 16 times," says Sanchez. "So, I think that this is a really interesting and compelling buy."

(See: CNBC's technology coverage)

CNBC contributor Andrew Busch, editor and publisher of The Busch Update, is more wary about investing in IBM.

"It's really tough to buy IBM," says Busch. "From a peak of $215, they've dropped down to a low of $172."

Busch sees the stock as having traded in a downtrend channel for much of 2013. However, it recently broke through the top-end of the channel.

"Be careful with this thing," cautions Busch. "I'd buy it with a stop below $172 but, if it comes back inside that downtrend channel, that's not good for 2014."

To see more of why Sanchez likes IBM for 2014 and to see Busch's charts on the technicals for the stock, watch the video above.

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