This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

TSC Ratings' Updates: IBM

Net income fell to -$330 million in the most recent quarter from $52 million in the year-ago quarter, significantly underperforming the S&P 500 and the auto components industry. ROE also greatly decreased, a signal of major weakness. Goodyear's very high debt-to-equity ratio of 4.9 is higher than the industry average, implying very poor management of debt levels, and its poor quick ratio of 0.9 illustrates its inability to avoid short-term cash problems. The 11.6% gross profit margin is extremely low, having decreased from the same period last year.

Shares have tumbled by 76.3% over the past year, underperforming the S&P 500, and EPS are down 607.4% compared with the year-earlier quarter. The fact that the stock has come down in price over the past year could be one of the factors that may help make the stock attractive down the road, but right now, we believe that it is too soon to buy.

We've upgraded IBM (IBM - Get Report) from hold to buy, driven by its impressive record of earnings per share growth, increase in net income, notable return on equity, expanding profit margins and relatively strong performance when compared with the S&P 500 during the past year. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

EPS rose by 17.1% in the most recent quarter compared with the year-ago quarter, and we expect the company's two-year pattern of positive EPS growth to continue. Net income rose by 12% compared with the year-ago quarter, from $3.95 billion to $4.4 billion, greatly exceeding that of the S&P 500 but underperforming the computer and peripherals industry average. ROE also greatly increased, a signal of significant strength. Revenue fell by 6.4%. IBM's 47.2% gross profit margin is strong, though it has decreased from the year-ago quarter. The 16.4% net profit margin compares favorably with the industry average.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
GT $26.36 -0.79%
IBM $161.15 1.10%
NTWK $6.17 -0.32%
ROC $79.20 0.42%
XEC $109.40 -0.59%


DOW 18,150.33 +53.43 0.30%
S&P 500 2,101.95 +3.42 0.16%
NASDAQ 4,983.5930 +16.4520 0.33%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs