> Can anyone explain why valuation is so low on IBM?  Only trading for
> $117/share.  They have ~$9/share cash which means net price of $108,
> and they just announced that they are projecting EPS of $11/share for
> 2010, equating to a 10.2% yield (really higher because of depreciation
> and fact that portion of R&D is like investment rather than an
> expense).  Historically most of their EPS has been returned to
> shareholders through either dividends or buybacks, with the rest being
> invested into new acquisitions & ventures.  And yet, they have still
> managed around 15% average earnings growth for last 4 years.  So if
> that growth holds up you are easily getting over a 20% return at
> current levels.  I don't get it, this stock should be around $175 at
> least.  Are people expecting their earnings to fall?  Or is it just
> the psychological factor that this price is near its 52-week high?

> Can anyone explain why valuation is so low on IBM?  Only trading for
> $117/share.  They have ~$9/share cash which means net price of $108,
> and they just announced that they are projecting EPS of $11/share for
> 2010, equating to a 10.2% yield (really higher because of depreciation
> and fact that portion of R&D is like investment rather than an
> expense).  Historically most of their EPS has been returned to
> shareholders through either dividends or buybacks, with the rest being
> invested into new acquisitions & ventures.  And yet, they have still
> managed around 15% average earnings growth for last 4 years.  So if
> that growth holds up you are easily getting over a 20% return at
> current levels.  I don't get it, this stock should be around $175 at
> least.  Are people expecting their earnings to fall?  Or is it just
> the psychological factor that this price is near its 52-week high?

> Several things I think lead to the low valuation.  Analysts still
> consider this company a hardware company, which of course it resembles
> less and less every day.  It's is now a software and services company,
> but it's still being valued relative to it's old peers in the hardware
> space.  I see remarkable things in the future for IBM, and if I had
> more money that wasn't tied up in other stocks I would buy more (hell,
> maybe I'll buy some with margin).  It has run, but I think that it has
> another $20 to $30 to go before the market turns again.  If you're
> buying as a long-term play (many years out) though, it shouldn't
> matter.  To me IBM has been a buy for the last few years at least.  I
> was laughed at a few years back for my BUY call on IBM, but now it
> just seems obvious that IBM is almost guaranteed to rise faster than
> the indexes...

> On Sep 8, 3:25 pm, Jacob <jacobsw...@gmail.com> wrote:

> > Can anyone explain why valuation is so low on IBM?  Only trading for
> > $117/share.  They have ~$9/share cash which means net price of $108,
> > and they just announced that they are projecting EPS of $11/share for
> > 2010, equating to a 10.2% yield (really higher because of depreciation
> > and fact that portion of R&D is like investment rather than an
> > expense).  Historically most of their EPS has been returned to
> > shareholders through either dividends or buybacks, with the rest being
> > invested into new acquisitions & ventures.  And yet, they have still
> > managed around 15% average earnings growth for last 4 years.  So if
> > that growth holds up you are easily getting over a 20% return at
> > current levels.  I don't get it, this stock should be around $175 at
> > least.  Are people expecting their earnings to fall?  Or is it just
> > the psychological factor that this price is near its 52-week high?- Hide quoted text -

> - Show quoted text -

> I am trying to figure out how to value tech companies and IBM is at a
> very low price given it is a software consulting firm. I think IBM
> will just have to buy more stock in, keep earnings growing and let
> time take it higher.

> On Sep 8, 7:11 pm, Spiro Marangoudakis <smaran...@gmail.com> wrote:

> > Several things I think lead to the low valuation.  Analysts still
> > consider this company a hardware company, which of course it resembles
> > less and less every day.  It's is now a software and services company,
> > but it's still being valued relative to it's old peers in the hardware
> > space.  I see remarkable things in the future for IBM, and if I had
> > more money that wasn't tied up in other stocks I would buy more (hell,
> > maybe I'll buy some with margin).  It has run, but I think that it has
> > another $20 to $30 to go before the market turns again.  If you're
> > buying as a long-term play (many years out) though, it shouldn't
> > matter.  To me IBM has been a buy for the last few years at least.  I
> > was laughed at a few years back for my BUY call on IBM, but now it
> > just seems obvious that IBM is almost guaranteed to rise faster than
> > the indexes...

> > On Sep 8, 3:25 pm, Jacob <jacobsw...@gmail.com> wrote:

> > > Can anyone explain why valuation is so low on IBM?  Only trading for
> > > $117/share.  They have ~$9/share cash which means net price of $108,
> > > and they just announced that they are projecting EPS of $11/share for
> > > 2010, equating to a 10.2% yield (really higher because of depreciation
> > > and fact that portion of R&D is like investment rather than an
> > > expense).  Historically most of their EPS has been returned to
> > > shareholders through either dividends or buybacks, with the rest being
> > > invested into new acquisitions & ventures.  And yet, they have still
> > > managed around 15% average earnings growth for last 4 years.  So if
> > > that growth holds up you are easily getting over a 20% return at
> > > current levels.  I don't get it, this stock should be around $175 at
> > > least.  Are people expecting their earnings to fall?  Or is it just
> > > the psychological factor that this price is near its 52-week high?- Hide quoted text -

> > - Show quoted text -- Hide quoted text -

> - Show quoted text -

> Historically IBM has not been a good buy.  Starting 99 through 06, its
> stock went flat and its dividend was small.  It rode the crashes of 07
> and 08 extremely well, and its dividend is now moderate.  But I don't
> consider their move to the services business model to be proven, and
> since there is a smaller barrier to competitor entry in this industry
> than in manufacturing, it is near-impossible to prove.

> I say all this owning a lot of IBM from the 80s, and loving the price
> target of 145.  But I would have to sell it carefully because of
> unrealized gains, so am somewhat locked in.

> On Sep 10, 9:02 am, Frank <frank1...@gmail.com> wrote:

> > I am trying to figure out how to value tech companies and IBM is at a
> > very low price given it is a software consulting firm. I think IBM
> > will just have to buy more stock in, keep earnings growing and let
> > time take it higher.

> > On Sep 8, 7:11 pm, Spiro Marangoudakis <smaran...@gmail.com> wrote:

> > > Several things I think lead to the low valuation.  Analysts still
> > > consider this company a hardware company, which of course it resembles
> > > less and less every day.  It's is now a software and services company,
> > > but it's still being valued relative to it's old peers in the hardware
> > > space.  I see remarkable things in the future for IBM, and if I had
> > > more money that wasn't tied up in other stocks I would buy more (hell,
> > > maybe I'll buy some with margin).  It has run, but I think that it has
> > > another $20 to $30 to go before the market turns again.  If you're
> > > buying as a long-term play (many years out) though, it shouldn't
> > > matter.  To me IBM has been a buy for the last few years at least.  I
> > > was laughed at a few years back for my BUY call on IBM, but now it
> > > just seems obvious that IBM is almost guaranteed to rise faster than
> > > the indexes...

> > > On Sep 8, 3:25 pm, Jacob <jacobsw...@gmail.com> wrote:

> > > > Can anyone explain why valuation is so low on IBM?  Only trading for
> > > > $117/share.  They have ~$9/share cash which means net price of $108,
> > > > and they just announced that they are projecting EPS of $11/share for
> > > > 2010, equating to a 10.2% yield (really higher because of depreciation
> > > > and fact that portion of R&D is like investment rather than an
> > > > expense).  Historically most of their EPS has been returned to
> > > > shareholders through either dividends or buybacks, with the rest being
> > > > invested into new acquisitions & ventures.  And yet, they have still
> > > > managed around 15% average earnings growth for last 4 years.  So if
> > > > that growth holds up you are easily getting over a 20% return at
> > > > current levels.  I don't get it, this stock should be around $175 at
> > > > least.  Are people expecting their earnings to fall?  Or is it just
> > > > the psychological factor that this price is near its 52-week high?- Hide quoted text -

> > > - Show quoted text -- Hide quoted text -

> > - Show quoted text -- Hide quoted text -

> - Show quoted text -