IBM Shares Hit Another High As Investors Seek Stable Growth
12/01/97
By CHRISTOPHER GRIMES
Dow Jones Newswires
NEW YORK -- Shares of International Business Machines Corp. chalked up a new high Monday for a second straight session as investors search for stability amid a volatile technology sector.
Analysts said there hasn't been much market-moving news from the Armonk, N.Y., company recently, but, in the current technology environment, that is probably a good thing.
"Look at all the preannouncements and earnings disappointments we have had this year," said Brown Brothers Harriman & Co. analyst Bill Milton. "We've not had a disappointment from IBM."
Milton pointed to other top technology stocks, such as Intel Corp., Hewlett-Packard Corp. and Motorola Inc., as examples of companies that have disappointed this year. He said investors may be choosing "less growth, but more predictable growth" by buying Big Blue.
While some tech stocks posted fast and furious gains in the summer, IBM posted respectable, but not stellar, gains. Likewise, its decline was more moderate during the recent sell-off, Mr. Milton said.
Laura Conigliaro, an analyst at Goldman, Sachs & Co., agreed IBM has served as a defensive stock recently. But, she said the company also appears poised for a strong 1998.
"Obstacles are beginning to fade from some of their product lines," Ms. Conigliaro said. "In my view, 1998 has the earmarks of being a more attractive top-line growth story" for IBM.
The company appears on track for a healthy fourth quarter, too, as sales of mainframe computers exceeded expectations for the first month of the quarter, said Gary Helmig, a SoundView Financial Group Inc. analyst.
"October has been a good month for them," Mr. Helmig said, which is a good sign for a company that typically does most of its business in the last three weeks of the quarter.
IBM shares finished the session up $3.0625 to $112.5625 in New York Stock Exchange composite trading, well ahead of the previous all-time high of $109.9375 set Friday. |
