IBM Message Board - Msg: 4305160

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Technology Stocks : IBM

IBM 312.75

+0.7%

3:59 PM EST

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To: Mark Brophy who wrote (3028)	5/3/1998 3:48:00 PM
From: Toby	Read Replies (1) of 8218

Every share IBM has repurchased until now has been a good investment on behalf of the shareholders. Who's to say that the stock is no longer a good investment? Share repurchases are a sign by management that they believe that the company's prospects are good. Responsible management would only deploy shareholders' money responsibly. Had IBM not been repurchasing shares, they'd have missed quarters and have had disappointing EPS growth, and we'd all be a lot worse off, instead of enjoying a steady multiple expansion based on the company's predictability of earnings and increasing popularity as an investment. I prefer to believe that IBM has excellent management who can continue to grow profits, and begin to grow revenue no that the company is on the verge of firing on all cylinders. Now that services are an increasingly important part of the revenue equation, and mainframe servers less, IBM is positioned to pick up revenue growth. In the past, realigning the businesses took priority. The bottom line for me is that Lou Gerstner has worked wonders in his first five years. He could be the next Jack Welch by the time he retires. I'm not going to miss out, or second guess his moves at this time by selling. There are too few good stocks to toss this one overboard in the belief that I know better than proven mgmt. how to deploy the company's cash flow.

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