Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, global IT solutions giant International Business Machines
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, N.Y. (1910) |
Market Cap | $197.8 billion |
Industry | IT consulting and other services |
Trailing-12-Month Revenue | $99.87 billion |
Management |
CEO Samuel Palmisano (since January 2002) CFO Mark Loughridge (since July 2010) |
Return on Equity (average, past 3 years) | 66% |
Dividend Yield | 1.6% |
Competitors |
Hewlett-Packard
Oracle
Microsoft |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 90% of the 4,041 members who have rated IBM believe the stock will outperform the S&P 500 going forward. These bulls include All-Star vitrified, who is ranked in the top 0.5% of our community, and pbkirk.
Late last year, vitrified touched on several of the tailwinds working in IBM's favor: "Strong growth and opportunities, particularly in emerging markets, as we move to smarter, networked systems. Very well-run company with comparatively limited downside risk. ... IBM is well positioned to compete."
In fact, IBM's three-year average return on equity (66%) easily tops that of x86 server foes Dell
CAPS member pbkirk elaborates on the bull case:
Few companies have the scale to put together teams with a sufficiently wide range of expertise to create custom large-scale enterprise-computing solutions. Furthermore, unlike Oracle or Microsoft, IBM is not irrevocably wedded to any particular hardware or software -- they are very well positioned to build on emerging cloud resources.
Right now a lot of new technologies are emerging which will save companies a great deal of money -- and companies have piles of cash to invest in their IT infrastructure. This will create a few very good years for IT solution-providers.
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