IBM Message Board - Msg: 4134008

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Technology Stocks : IBM

IBM 309.24

-0.5%

Dec 12 9:30 AM EST

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To: jack wuo who wrote (2799)	4/20/1998 5:52:00 PM
From: David Lee Smith	Read Replies (1) of 8218

IBM at $90 not $200!! Basic rule of investing 101...sell a stock when yearly quarter over quarter margins decline. IBM's first quarter margins were down year-over-year during the first quarter. I don't want to wait to find out if its really a temporary decline or not. I've witnessed too many tech stocks dropping 50% within six months after reporting a decline in quarterly margin comparisons while they tried to poo poo the poor investors. Value line expected $1.40 for this quarter. That meant that first call estimates dropped like a rock last quarter. I do not view 2% top line growth as anything to crow about. As far as PE ratio, IBM deserves less than its 14X average because of increasing competition and continuing problems in Asia. Although IBM only competes in a very small segment in Asia, the over-all impact on its business from currency losses to diminished worldwide investment is an invisible hand pushing against higher margins and growth. I hope you are right about IBM opening at 115; I want to short the stock. I feel betrayed by IBM's IR. I expected much better earnings per share.

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