Annex Bulletin 2006-17 April 26, 2006
Excerpts from CONFIDENTIAL client edition
Updated 4/26/06, 3:45PM PDT, adds Forecast Update
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:
(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.
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.
"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.
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Bulletin Index 2006 (including all prior years' indexes)
For additional Annex Research reports, check out... Annex Bulletin Index 2006 (including all prior years' indexes)