IBM Message Board - Msg: 5125976

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Technology Stocks : IBM

IBM 309.24

-0.5%

Dec 12 9:30 AM EST

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To: Greg R who wrote (3431)	7/8/1998 12:48:00 AM
From: Warren Gates	Read Replies (2) of 8218

My first post here. Buying shares in IBM for me is a no brainer. I just treat IBM as a software/services/solutions company with an annual revenue of 45B, growing at 15- 20% annually, with about 12% profit margin. 3X sales should be quite reasonable giving it a market cap of 135 Billion. So at 973M shares, stock should be around $138. Oh, the hardware part of the business is extra. Sure revenue here has been flat but that doesn't mean they're not making money out of it. I'm so surprised analysts are still bothered by the decline in mainframe revenue. This is deliberate on IBM's part. This is nothing different than Intel cutting prices on its chips. IBM used to offer software and services to sell mainframes. Now, IBM has transformed itself to a systems integrator, and in case the customers want some hardware, they've got some, too. To all IBM bears, check out IBM's new DB2 Universal Server. Just the fact that it has regained the technological #1 position against Oracle has made me sell all my Oracle shares. This alone is good proof that IBM is ready to lead again and all those billions poured into R&D has finally began to bear fruit.

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