Shares of IBM (NYSE:IBM) fell 3.25% on Thursday after the company reported disappointing earnings. Of course, the shares are still higher by nearly 2% in 2014 while the Dow Jones has traded lower by 1%. While investors have raced into buying old tech such as Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), Intel (NASDAQ:INTC), and Hewlett-Packard (NYSE:HPQ) amid a momentum stock sell-off, IBM's earnings might have told us that's it's one old tech name that's not worth buying.

Big Blue: Full of problems
After a year of double-digit stock losses and trading at just 13 times earnings, it's no surprise that investors gravitated toward IBM while momentum stocks and "new tech" stocks sold off in recent months. However, in 2013, as on Thursday, there has been great reason for its stock losses.

Aside from missing expectations on both revenue and EPS in the first quarter, IBM saw year-over-year revenue declines in every segment except software and its global business services. Its closely watched backlog also declined by $5 billion quarter-over-quarter to $138 billion, further supporting the idea that the rise of cloud services are weighing heavily on its on-premises IT business.

Poor sales performance and a declining backlog are just the start of IBM's problems, however, and are nothing new. The company's tax rate of 20% was significantly higher than in previous quarters, and was almost double. As a result, IBM still missed EPS estimates despite spending $8.2 billion on buybacks; this was 40% more than the fourth quarter. Furthermore, IBM's business in China and its Power segment both saw 20% year-over-year declines, which complement a rather disturbing trend of top-line losses for Big Blue.


Year-Over-Year Revenue Growth (Decline)



















As you can see, we have to go back to the first quarter of 2012 just to find a quarter where IBM didn't see a year-over-year revenue decline; that's eight consecutive quarters of losses. This is a company that hasn't seen any real growth in five years, yet its stock has nearly doubled thanks to a bullish market and an aggressive buyback policy. This is a company that's not getting any better, but continues to gain the benefit of the doubt undeservingly.

If you're going to buy old tech
With most of technology's growth companies trading at 30 to 100 times earnings, it's no surprise that investors have found security in the older yet much cheaper names within the sector. And while this is a logical strategy amid excessive volatility, IBM has continuously proven that it's not the best answer.


2014 Stock Performance

P/E Ratio

Dividend Yield

2014 Expected Revenue Growth


























Given IBM's track record, it's kind of hard to imagine the company posting year-over-year revenue declines of only 0.5%. Therefore, until proven otherwise, investors can almost assume that it will miss expectations.

With that said, each of IBM's old tech peers look like far better opportunities.

Microsoft is clearly growing with a newfound focus on the cloud with Windows and Office updates. As the fastest growing of the bunch and paying a 2.8% dividend, Microsoft looks to be a good investment value.

Like Microsoft, Oracle is seeing growth, including its license update and product support revenue that makes up nearly 50% of total sales. At 16 times earnings it's a bit pricey, and its dividend doesn't provide too much downside protection. With growth, however, it's still a better option than IBM.

Intel trades with a premium similar to its peers, but it pays the highest dividend. Furthermore, expectations for 0.8% top-line growth might be underestimated: In its first quarter it grew by 1.7% thanks to a surprisingly strong CPU segment, which makes up more than 60% of revenue and has shown momentum in recent quarters .

Last is HP, which might lack growth but is the cheapest of the bunch. In competing with IBM, it has stolen market share in many key segments. One segment is hardware, in which HP posted 2% growth and grew its market share by 150 basis points. Meanwhile, IBM continues to lose market share in hardware, including double-digit year-over-year declines. Furthermore, HP's last quarter included its first three-month period of positive PC sales in nearly two years, which continues to show that HP is a company on the rise .

Final thoughts
There just isn't much value in IBM. The company spent nearly $14 billion in buybacks last year, and will not exceed that level in 2014; this means that there won't be as much buying pressure throughout the remainder of this year. This is a company that has given us no reason to be bullish, and until proven otherwise, there are far better opportunities within old tech.

Brian Nichols has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel, International Business Machines, Microsoft, and Oracle.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.