This is why I like IBM. It earns money in good time or bad time with relatively low beta. Principle number 1 is to keep my principle - that is buying a co. that earns money all the time and is priced reasonable or cheap. I am not sure that I want a stock goes down 80%, then bounce up 80% subject to whimsical feeling of the market/news. As long as the co. is earning money, great profit margin and ROE, management is shareholder friendly and returning money to shareholder. I would regard it a great investment. I cannot tell the difference of a black hole from a oil pit. In developing countries, you can probably buy a cert. of Bre-x to "prove" your oil reserve. That is a far more risky business, except the big integrated oil co. like XOM, CVX or BP. They are strong in balance sheet and trustworthy.
Sentiment: Strong Buy
In normal time, if it can earn even 1% of return, it should earn 20 billions. Therefore, all the big banks still has lots of runway. I like both BAC and C, both are under value and has at least 100 to 200% upside over 5 years.
The uptrend of MCD is continuing with increasing volume. The overall strength of high profit margin and high return on Equity are still improving. If the CEO can leverage its real estate, the stock will surge big time.
Sentiment: Strong Buy
The short was able to cover only less than 2 days of shares when there was 5.4 days outstnding. The shorts are in trouble in loosing hugh money in the year end. Yellen was pulling the shortie's leg.
Sentiment: Strong Buy
It means all the money earned in the past three years were accumulated in the balance sheet. A long consolidated pattern will trigger a hugh surge. The longer it goes sideway, the bigger the surge. Look at Microsoft. As long as the co. is earning hugh profit, this is a good sign. The volume of IBM is increasing on a up swing, very positive.
Which one will benefit more from the investment. BX pays 5 to 6% dividend. With recent sold investments and fund raised, will it be a better investment? GS has tailwind on M&A. Any advise. Thx
Did you notice that they bought back shares still. The shares count is decreasing from 81.27 to 79.12. This tells me that the acquisition is going to happen.
Latest chatter is about Yamana being a potential target for acquisition. Let see if it will happen. It will be win win for Gold Corp and Yamana
The cloud data centers move is indicative of the right strategy in moving towards high margin business. If IBM can crave out even 1/5 of the market, that is 40 billions. With its global reach and security focus strength, I would not be surprise it can grab 30% of cloud market share , that is about 66 billions per year. This is why Microsoft is focusing on the right area of "Cloud first". VOIP is just one example that business does not need PBX anymore at the premise, it goes to hosted vendor such as telecom co. Now, Brazil, China and India are the jewels of the upticks, I just know that these markets are big and at early stage, not sure about the demands , IBM is well positioned with the brand.
Cash of MSFT is increasing , number of shares decreasing, Free Cash Flow increasing. Even with 5% growth generation 27 billions free cash. , it should worth 64.
On 1 dollar of invested capital, IBM is earning 93 cents per year. That is the earning poer. Show me a stock that has better ROE. Plus, on a risk adjusted basis, IBM worths a lot more.. It was still able to earn hugh sum of cash in economy down time. That is the moat. Imagine when the cylinders of IT projects are firing. It will increase revenue further with fewer shares. If a stock earns 20 dollars per year, I would pay at least 200 dollar for it with stability. If it grows again with cloud or increase license fees, it can worth easily a P/E of 17 to 20 comparing with the peers.
Oh, it is only because I love AIG so much that I do not have spare to put into IBM. They are comparable cheap, both hve 100% upside in few years and the core holdings .
Just search on DOW 23000, you will find it. It is a secular bull market. You cannot have a recovered eco. without the banks recovered. The bank is only in 2nd inning.
I anticipate the buyback should have finished or close to finish. Now, it seems to confirmed that is the case. 20 per share earning can be expected in 2015 even though no promise. I calculated the 10 billions were able to buy a lot more shares for the past 2 months. Timing is right. Buying at this point still not late for 30-40% upside probablity within 1 year vs. perhaps 5% downside ristk if any. .
I will never know where the bottom. I do know the earning power of IBM. I shorted IBM 1 year ago. but now is the time to long. I do know the IT market is picking up big time. Plus, on a valuation basis, it is a bargain with no doubt.