IBM Stock Passes Century Mark (Analysis of Big Blue's Stock Performance)
Annex Bulletin 2007-01 January 9, 2007
A partially OPEN client edition
Also check out...
Happy Days Are Here Again (Analysis of Top 20 IT leaders' latest stock market and business performances)
Globalization Accelerates (Analysis of United Nation's annual survey of global investments)
IBM: A $125-Stock? (An update to "From Small Acorns Mighty Oaks Grow")
Capgemini: Longest Sustained Stock Price Rise (An update to "By Leaps and Bounds")
HP: New King of the Hill (Analysis of HP's fourth quarter business results)
IBM: From Little Acorns Mighty Oaks Grow (Analysis of IBM's "State of the Union")
Capgemini: By Leaps and Bounds (Analysis of Capgemini's preliminary third quarter business results)
Fujitsu: Good Performance Gets Better, More Global (Analysis of Fujitsu's first half FY2007 business results)
IBM: A Slam Dunk Quarter (Analysis of IBM third quarter business results)
IBM: Services in a Box (Analysis of IBM Global Services' Ground-shifting Announcements)
Strong Comeback by IT Stocks in Third Quarter (Analysis of top 20 IT companies' market and business trends)
Stock Buybacks: A Fading Fad (Dell, erstwhile "King of Fluff," suspends its stock buybacks)
Capgemini: Growth Continues (Revenues, net profit up in double digits, margins also improve)
Power of Manpower (While others move to India, Russia... AMD invests in New York, hailing "phenomenal" quality of its labor force)
Ebb Tide Lowers Most Boats (Analysis of EDS' and CSC's latest quarterly results)
IBM vs. HP: A Tale of Two Blues (Both companies are doing well in business, but only HP is favored by Wall Street; Big Blue trying to change that now with its new "India Opus") [Annex clients click here]
Updated 1/09/07, 1:15PM PDT; adds Annex Bulletins in 2006
Analysis of IBM Stock Performance
IBM Passes Century Mark
Stock Sets New 3-Year Record, Closes in on 5-year Mark
MAUI, Hawaii, Jan 9 - After flirting with the century mark for several days now, the IBM stock finally passed it late this morning (Jan 9) in intraday trading, setting a new three-year record, and closing in on the five-year mark.
The last two times the Big Blue shares crossed $100 (on their way down) were - the day IBM announced that Sam Palmisano would be taking over as CEO (see "Gerstner Legacy," Jan 29, 2002); and again on March 25, 2002 (see the chart). The IBM has traded under the century mark ever since. Until this morning, that is.
As we noted six weeks ago in a report filed from Moscow, "the IBM stock has come a long way since its summertime doldrums" (see "From Little Acorns Mighty Oaks Grow," Nov 2006). We asked rhetorically back then if that meant the stock was now fairly priced? "Not by a long shot," we answered (click on the chart to enlarge).
Comparing the IBM stock performance with those of some of its peers, we concluded that a fair price for Big Blue shares would be around $125 (see "IBM: A $125-Stock?", Nov 2006 and the above Nov 2006 chart). This week, some Wall Street firms have also upgraded the IBM shares. UBS, for example, is now reportedly calling for a new price target of $118.
That's a long way from $94, which is where IBM was in late November, not to mention $73 back in July, when we said the "IBM Stock (Was) Grossly Undervalued" (also see "Happy Days Are Here Again," Dec 2006). So Wall Street may be late coming to the Big Blue party, but it is now slowly but surely catching up with reality of the solid IBM business fundamentals. Better late than never...
Happy bargain hunting!
Separately, thought you may be interested in seeing the summary chart of our coverage of the IT industry in 2006:
As you can see, the "industry trends" category, within which we report on HP (14%), among other leading companies, accounted for nearly 40% of total Annex Bulletin pages. The "IT services" was the second most analyzed subject with 27% of total, while IBM topics accounted for a little less than a quarter of all issues.
For additional Annex Research reports, check out... Annex Bulletin Index 2006 (including all prior years' indexes)