This is IBM, and they have been recently fortunate enough to represent in their financials an average of technology generally. Outside IBM you have stocks that are gyrating wildly based on momentary successes and collosal failures. On average the successes might out-weigh failures and the result is the 6% solution.
There are far better opportunities in tech stocks for money you can let sit for a while. IBM will trade in an 80-120 range for a while, probably a long while. If they discovered a cure for cancer tomorrow it would only represent a 1% revenue surge. If you want to short-time trade it, its in the middle or top now. You have to buy when nobody wants it. That is easy in many other sub-sectors now. If you have money to buy without margin take a look at ATML/CPQ/INTC/TXN within the industry, LSI/VLSI/QNTM/WDC/SEG for more risk, etc.
I don't agree with your evaluation of IBM. IBM has it's hand in virtually every part of the tech sector, including consulting/services, PCs, laptops, disk storage, midrange and mainframe, networks, database, Java programming tools, groupware, microprocessors, Internet commerce, & year 2000 solutions. They are a major player in most of these areas, and even in the ones they aren't, they continue to press forward very hard under the leadership of their seriously driven CEO.
If you take IBM, break it up, and give it a middling tech stock multiple, it would be valued well above where it is now. They have some fat they need to trim, yes. And with their size, it takes a lot to show growth, but this is one of the few tech stocks with reasonable value & forward momentum you can find. |
