Is IBM a Buy?

When it comes to information technology companies, Fool analyst Eric Bleeker thinks big can be better. The IT industry is currently dominated by eight companies worth more than $100 billion each -- the sort of enormous size and scale that makes it difficult for investors to track just exactly what a company is doing in its operations.

But in the case of IBM (NYSE: IBM  ) , Eric isn't scared off by the complexity; in fact, he's attracted by it. That's because IBM's strategy is to do everything: The company sells computer hardware, markets the software to utilize it, and then consults on how businesses can integrate and manage both in its operations. This end-to-end involvement embeds IBM in its partners' operations -- and makes the company very difficult to get rid of without risking enormous switching costs.

IBM also has a few things in the works, like a focus on software acquisitions to keep up growth and a goal to double profits by 2015. Also, while other tech companies -- such as Apple -- take a lot of heat for hoarding cash, IBM leverages its balance sheet better than any other tech company.

Is IBM a buy? Watch the video here.

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Eric Bleeker owns no shares of any stocks mentioned. Apple is a Stock Advisor recommendation. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On June 09, 2010, at 6:36 PM, ATeam59 wrote:

    What's a 120? Less than half way around?

  • Report this Comment On June 09, 2010, at 10:37 PM, Superdrol wrote:

    I own IBM as a legitimate investment. It is not as sexy as Apple but it is a quality company that is undervalued at the moment with a good dividnd track record.

  • Report this Comment On June 17, 2010, at 4:16 PM, TMFRhino wrote:

    Hey ATeam59,

    The idea's that it takes two minutes to complete... Guess we should do a better job clarifying that :).


    Eric Bleeker (TMFRhino)

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10/21/2016 4:01 PM
IBM $149.63 Down -1.89 -1.25%
IBM CAPS Rating: ****