Annex Bulletin 2006-17                               April 26, 2006

Excerpts from CONFIDENTIAL client edition

Annex clients click here

   

IBM CORPORATE

Updated 4/26/06, 3:45PM PDT, adds Forecast Update

Annex Research' Five-Year Forecast for IBM

Steady As She Goes

Emphasis on Quality Continues: Revenue to Rise in Single-; Earnings in Double-Digits

SCOTTSDALE, Apr 26 - "Steer clear of incredible shrinking IBM," screamed a bombastic headline of today's Real Money (TheStreet.com) (Jim Cramer) story.  Such stone age thinking - that bigger is better - is sadly still omnipresent on Wall Street.  Which is the reason the IBM stock is mired in the low 80s, as we pointed out in a quote in yesterday's Gannett Journal News story:

"If anyone wants to look at the quantum leap at IBM, they should look at profit margins," (Bob) Djurdjevic said. "Investors have to be savvy enough to accept the fact that sometimes smaller is better, but that's not the mentality on Wall Street. That may be why IBM is not getting the credit they deserve."

(from Gannett's Journal News, Apr 25, 2006)

Our just-updated five-year forecast for IBM reaffirmed our last year's conclusion - that "Quality over Quantity" (Mar 2005) is a new and welcome modus operandi at Big Blue.  

[snip]

Forecast Update

[snip]

Just to put things in perspective, IBM's 2006 net of $9.9 billion is 90% bigger than the earnings of Fujitsu, EDS, HP, Accenture, CSC and Capgemini - combined!  And even the IBM 2005 actual net was more than 50% larger.

We don't see anything "low" or shabby about the quality or size of such earnings, as the Street.com columnist suggested.  We see the new Big Blue as one giant cash generating machine.  Maybe Wall Street will also notice that if it keeps looking at IBM long and hard.

[snip] 

"That's all she wrote," we're afraid, for those of you who are NOT Annex Research clients, who are now reading the complete Annex Newsflash, along with all charts which back up our story.

Qualified media and friends of Annex may request a TEMPORARY User ID and Password by clicking here and explaining why they wish to have access to this particular Annex Bulletin.  Or call Bob Djurdjevic at 602-824-8111 (cell) to promise not to copy it or otherwise republish it.

To find our how you can become one of our clients, and read the rest of this and other Annex Bulletins, click on . Thank you.

Annex clients click here

Happy bargain hunting!

Bob Djurdjevic

For additional Annex Research reports, check out... Annex Bulletin Index 2006 (including all prior years' indexes)

Or just click on and use "company or topic name" keywords.

Volume XXII, Annex Newsflash 2006-17
April 26, 2006

Bob Djurdjevic, Editor
(c) Copyright 2006 by Annex Research, Inc. All rights reserved.
e-mail: annex@djurdjevic.com

8183 E Mountain Spring Rd, Scottsdale, Arizona 85255
Tel/Fax: +1-602-824-8111

The copyright-protected information contained in the ANNEX BULLETINS and ANNEX NEWSFLASHES is part of the Comprehensive Market Service (CMS).  It is intended for the exclusive use by those who have contracted for the entire CMS service.

Home | Headlines | Annex Bulletins | Index 2006 | About Founder | SearchFeedbackClips | Activism | Client quotes | Workshop | Columns | Subscribe