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IBM - dinosaur or future growth
10-18-2018, 06:25 AM
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#1
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Dryer sheet wannabe
Join Date: Jan 2018
Posts: 17
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IBM - dinosaur or future growth
Hello all, wanted to get thoughts on IBM...relatively disappointing earnings yesterday pushed stock to 2 year lows. They have potential growth areas such as AI and Blockchain, but also have a slowing legacy business. Patient investors collect a juicy and relatively safe yield of more than 4%. I own some shares at $142 so was thinking of adding a bit. Would love to hear your thoughts and if you already own shares what your plan is of anything. Thanks!
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10-18-2018, 07:18 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 1,961
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- Their AI is more hype than reality.
- They are borrowing to pay the dividend (though at low rates that may not be a bad thing)
- IBMs mid to upper management is absolutely clueless technically and on how to manage people or business - they can only parrot buzzwords.
- IBM invented "cloud" and virtual machines 40 years go, lost the transition to distributed computing, and then got run over by Amazon, VMware, etc when the technology cycle circled back around to cloud and VMs.
The head is brain dead, the rest of the body is running on reflexes.
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10-18-2018, 07:27 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Location: SoCal, Lausanne
Posts: 4,408
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IBM has been greeting customers into the Jurassic era for decades now. They have been playing games with their earnings by buying back stock and taking on debt. They need new leadership and they need it quickly. The CEO is one of the highest paid in the industry and should be the lowest. Even Warren Buffet has given up.
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10-18-2018, 08:08 AM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,719
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Yield is at 4.7%. I would wait for 5%.
Growth estimates for IBM look very poor.
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10-18-2018, 08:23 AM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
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I have a huge legacy capital gain and it will go tax free to charity so the stock performance is secondary to the dividend. I think they lost their way when they tried to transition to services in the 90s. They got into the custom development business instead of capitalizing on cloud (except for AI). When Buffett gave up on them, that was a kiss of death.
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For the fun of it...Keith
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10-18-2018, 08:29 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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I’ve heard they are also into blockchain too. It seems like they like to dibble a lit bit in everything. No idea about the stock. But I tend to think it’s in the category of GE and Ford now. Not touching it.
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Just another day in paradise
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10-18-2018, 08:33 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 1,558
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 Quote:
Originally Posted by Spock
- Their AI is more hype than reality.
- They are borrowing to pay the dividend (though at low rates that may not be a bad thing)
- IBMs mid to upper management is absolutely clueless technically and on how to manage people or business - they can only parrot buzzwords.
- IBM invented "cloud" and virtual machines 40 years go, lost the transition to distributed computing, and then got run over by Amazon, VMware, etc when the technology cycle circled back around to cloud and VMs.
The head is brain dead, the rest of the body is running on reflexes. |
Why do you think they are borrowing to pay the dividend?
They have essentially the same debt and cash levels that they had last year.
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10-18-2018, 08:38 AM
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#8
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Recycles dryer sheets
Join Date: Sep 2014
Location: Miami
Posts: 337
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IBM and GE are already in the dustbin. The companies survive just to pay the dividend like ATT, GM, Ford etc... History is littered with decaying giants that fell behind. They are OK for a specutlative short trade but invest at your peril.
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FIRE July 2015
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10-18-2018, 12:06 PM
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#9
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Full time employment: Posting here.
Join Date: Jul 2005
Posts: 617
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All of the reasons mentioned in the replies to the OP are the reasons why I sold the bulk of my holdings back in 2014. Also the fact that they don't want to retain their most experienced technical staff. They'd rather replace them with young, cheaper, inexperienced workers in order to bolster their numbers.
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10-18-2018, 12:08 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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Quote:
Originally Posted by Vincenzo Corleone
All of the reasons mentioned in the replies to the OP are the reasons why I sold the bulk of my holdings back in 2014. Also the fact that they don't want to retain their most experienced technical staff. They'd rather replace them with young, cheaper, inexperienced workers in order to bolster their numbers.
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They pay ok, not great. My daughter got an offer from IBM at a job fair even after she told them she was not interested. They sent her one anyway for the location in Boston.
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Just another day in paradise
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10-18-2018, 12:35 PM
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#11
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,727
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Our big spender Robbie is an investor in IBM. Maybe he will post in here about his experiences. Old Shooter also commented on IBM in a thread a while back.
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*********Go Yankees!*********
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10-18-2018, 01:08 PM
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#12
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by Spock
- Their AI is more hype than reality.
- They are borrowing to pay the dividend (though at low rates that may not be a bad thing)
- IBMs mid to upper management is absolutely clueless technically and on how to manage people or business - they can only parrot buzzwords.
- IBM invented "cloud" and virtual machines 40 years go, lost the transition to distributed computing, and then got run over by Amazon, VMware, etc when the technology cycle circled back around to cloud and VMs.
The head is brain dead, the rest of the body is running on reflexes. |
++
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10-18-2018, 01:19 PM
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#13
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,327
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But, but,but....Watson!
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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10-18-2018, 02:12 PM
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#14
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Full time employment: Posting here.
Join Date: Jul 2005
Posts: 617
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Quote:
Originally Posted by jazz4cash
But, but,but....Watson!
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I have to LOL at that because that's what I usually say to myself whenever I hear their revenue dropped yet again.
But, but, but....Watson!
But, but, but....Cloud! THE CLOUD!
But, but, but....Blockchain!
Pffft.
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10-18-2018, 02:16 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,901
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IBM is considered a leader, perhaps the leader, in quantum computing hardware. Quantum computing looks poised to disrupt conventional computing, and whichever company gets to define the new standards in that area will do very well. Will that be IBM? I'll be watching.
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10-18-2018, 02:19 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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After reading this thread, I wonder is there anything else that IBM is not involved in.
__________________
Just another day in paradise
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10-18-2018, 02:57 PM
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#17
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,327
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Quote:
Originally Posted by Vincenzo Corleone
I have to LOL at that because that's what I usually say to myself whenever I hear their revenue dropped yet again.
But, but, but....Watson!
But, but, but....Cloud! THE CLOUD!
But, but, but....Blockchain!
Pffft.
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No No No. it’s not THE CLOUD, it’s THE IBM CLOUD!
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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10-19-2018, 03:24 AM
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#18
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Full time employment: Posting here.
Join Date: Jun 2016
Posts: 889
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Long term I am not optimistic. The capital investment just isn’t there versus the competition.
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10-19-2018, 05:33 AM
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#19
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Quote:
Originally Posted by GrayHare
IBM is considered a leader, perhaps the leader, in quantum computing hardware. Quantum computing looks poised to disrupt conventional computing, and whichever company gets to define the new standards in that area will do very well. Will that be IBM? I'll be watching.
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Quantum computing is nowhere near practical rollout for a billion dollar business.
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10-19-2018, 07:01 AM
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#20
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,719
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Quote:
Originally Posted by Fedup
After reading this thread, I wonder is there anything else that IBM is not involved in.
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Growth?
"A relationship [company], I think, is like a shark, you know? It has to constantly move forward or it dies. And I think what we got on our hands is a dead shark." Woody Allen
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