This Day On The Street
Continue to site
ADVERTISEMENT
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

IBM Fights for Respect and Relevance on Rough Seas of Investor Confidence



Apple had Tim Cook to guide Apple's turnaround. IBM has Rometty, a 33-year IBM veteran who knows her company like no one else.

"We're a $100 billion ship that's going to turn" she said recently. She speaks to many business leaders and CEO clients, and she claims all are interested in IBM's emphasis on cloud computing, flash storage systems, and efforts to participate in the mobile communications tsunami.

The CEO said IBM's clients "are interested in cloud, to a certain degree. But what they are really interested in is the data and analytics piece. That's going to change how they operate and what they can do." She's determined to give those clients what they want the most.

Here's my take on what's ahead for IBM: If the company offers an upside surprise and positive guidance when it reports second quarter numbers on July 17, the stock may rally.

If it misses on revenue even by a penny, it wouldn't surprise me if shares test the 52-week low of $172 before an event-driven bounce off the bottom.

What events may cause a rebound?

A restructuring of IBM's $44 billion in long-term debt, an unexpected large government contract, or activist investors deciding shares are too cheap. The stock is currently priced with a forward PE ratio of only 9.2, and these kind of catalysts are a distinct possibility.

Or the company may pull an "Apple" and surprise with a stock split and a dividend increase.

The S.S. IBM won't sink, but it may face stormy seas and strong headwinds before smooth sailing for investors. I'm looking for "icebergs" and activist investors straight ahead.

At the time of publication the author had a position in APPL.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.


Google+

>>On Fire Phone, Amazon Steals Its Own Feature From Apple's iPhone

Marc Courtenay is a financial research analyst and the founder of Advanced Investor Technologies LLC as well as the publisher and editor of www.ChecktheMarkets.com.
2 of 2

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
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
IBM $160.67 0.00%
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs