IBM (NYSE:IBM) continues to tumble: Shares of Big Blue are down nearly 15% in 2014, badly underperforming the broader market, and currently hovering near four-year lows. A poor earnings report, one that notably included the withdrawal of guidance, has created doubts about the company's future and emboldened IBM bears.

But at these levels, IBM shares are unquestionably cheap. Should investors consider buying this Buffett favorite?

Bargain-bin valuation
By almost any measure, shares of IBM are attractively valued. Currently, IBM is trading with a price-to-earnings ratio near 10 and a forward P/E of only 9.6. It isn't the best dividend in its industry, but IBM currently yields an attractive 2.7%. Its price-to-sales and price-to-book ratios -- each around 1.6 -- are impressively low for a large cap tech stock, with other firms like Microsoft and Oracle trading at valuations several times higher.

The next tech has-been?
But this is not a new phenomenon -- IBM has been relatively cheap for several quarters now, and as the share price has fallen, its valuation has only declined further.

IBM's decline was foreseen by several critics, who found particular issue with its lack of organic growth. Credit Suisse downgraded the stock more than a year ago, largely for that reason, and in July, hedge fund legend Stanley Druckenmiller expressed similar concerns, arguing that the company was employing financial engineering to raise its share price, rather than investing in its business. More recently, in October, Billionaire Mark Cuban went so far as to declare that IBM was no longer a tech company.

It's lack of growth is indisputable: Last quarter, IBM generated $22.4 billion of revenue -- during the same quarter in 2008, it generated $25.3 billion.

This challenged business is still throwing off cash
But IBM has been able to boost its earnings per share (and thus its share price) by aggressively buying back stock. So long as it continues to generate impressive levels of cash flow -- $2.2 billion last quarter -- that buyback program should continue.

More intriguing is the possibility of a management shakeup, or general shift in strategy, perhaps catalyzed by an activist investor. IBM shares rose on Monday amid rumors that Carl Icahn was buying a stake. With a market cap near $160 billion, IBM is large, but not large enough to repel a dedicated activist. Though it remains mere chatter, after succeeding with eBay and Apple, it's plausible that Icahn could set his sights on IBM.

But even if he never takes a stake, others could emerge. ValueAct managed to score a Microsoft board seat earlier this year, demonstrating that big cap tech is no longer immune to shareholder activism.

As for what role an activist investor could play, a possible spinoff, split, or outright sale of some of the company seems plausible. Although IBM's legacy businesses are in decline, it does have some growth segments, notably its cloud and mobile software and security business. IBM's management has claimed that these businesses -- as separate companies -- would be rewarded for their rapid growth. Strategic alternatives designed to bring better exposure to IBM's growing business units may earn the company with a higher multiple.

IBM is finally interesting
There's not much to get excited about when it comes to IBM: Its critics are right; in total, this company is not growing. But it is a cash flow juggernaut, and absurdly cheap. The possibility of activist involvement, though unconfirmed, makes IBM a more intriguing possibility than ever before.

IBM has certainly been a disappointing stock in 2014, but value hunters looking for tech exposure could do worse.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and eBay. The Motley Fool owns shares of Apple, eBay, 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.