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4-Star Stocks Poised to Pop: IBM

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 8:07PM

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Market-trouncing returns could be written in this 4-star.

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, International Business Machines (NYSE:IBM) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at IBM's business and see what CAPS investors are saying about the stock right now.

IBM facts

Headquarters (founded)

Armonk, New York (1910)

Market Cap

$109.63 billion


Computer Hardware

TTM Revenue

$105.49 billion


CEO Samuel Palmisano (since 2002)

CFO Mark Loughridge (since 2004)

Return on Capital (average last three years)


Dividend Yield



Hewlett-Packard (NYSE:HPQ)


CAPS members bullish on IBM also bullish on


General Electric (NYSE:GE)

CAPS members bearish on IBM also bearish on


Microsoft (NASDAQ:MSFT)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 2,711 of the 3,048 members who have rated IBM -- some 89% -- believe the stock will outperform the S&P 500 going forward. These Foolish bulls include beregra and BeachExec, both of whom are ranked in the top half of our community.

Last month, beregra ran down some of Big Blue's bullish points: "Great technology; no limitation on financing; strongly positioned for nonUS growth in services; This will accelerate as the recession unwinds."

In a more recent pitch from last week, BeachExec agreed, pointing to the bright cloud over IBM's future:

In addition to its leadership position in nearly all things IT, IBM is also a serious Cloud Computing play. Pundits seem to oogle over Google when it comes to Cloud Computing. I would argue that IBM is better positioned to reap the rewards if Cloud Computing truly is a disruptive technology of the near future. Its vertical strength up and down the Cloud Computing "stack" virtually guarantees IBM fully partakes in Cloud profits. ... And its services combined with its R&D prowess and deep understanding of its clients' businesses positions IBM to be the leader in Cloud Computing.

What do you think about IBM, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Google is a Motley Fool Rule Breakers pick. Dell and Microsoft are selections of Inside Value. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

International Business Machines Corporation Stock Quote
International Business Machines Corporation
$131.50 (1.57%) $2.03
HP Inc. Stock Quote
HP Inc.
$33.98 (4.59%) $1.49
Microsoft Corporation Stock Quote
Microsoft Corporation
$289.16 (2.43%) $6.86
Alphabet Inc. Stock Quote
Alphabet Inc.
$119.70 (2.63%) $3.07
General Electric Company Stock Quote
General Electric Company
$77.14 (2.95%) $2.21
Dell Technologies Inc. Stock Quote
Dell Technologies Inc.
Dell EMC Stock Quote
Dell EMC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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