Trade-Ideas: International Business Machines (IBM) Is Today's Pre-Market Mover With Heavy Volume Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified International Business Machines ( IBM) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified International Business Machines as such a stock due to the following factors:

  • IBM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $685.0 million.
  • IBM traded 398,178 shares today in the pre-market hours as of 8:25 AM, representing 10% of its average daily volume.

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More details on IBM:

International Business Machines Corporation provides information technology (IT) products and services worldwide. The stock currently has a dividend yield of 2%. IBM has a PE ratio of 13.5. Currently there are 11 analysts that rate International Business Machines a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for International Business Machines has been 3.7 million shares per day over the past 30 days. International Business Machines has a market cap of $208.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.71 and a short float of 1.7% with 4.66 days to cover. Shares are down 0.8% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates International Business Machines as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the IT Services industry and the overall market, INTL BUSINESS MACHINES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for INTL BUSINESS MACHINES CORP is rather high; currently it is at 53.83%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.94% trails the industry average.
  • INTL BUSINESS MACHINES CORP's earnings per share declined by 12.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INTL BUSINESS MACHINES CORP increased its bottom line by earning $14.41 versus $13.12 in the prior year. This year, the market expects an improvement in earnings ($16.90 versus $14.41).
  • Despite the weak revenue results, IBM has outperformed against the industry average of 15.3%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, IBM has underperformed the S&P 500 Index, declining 10.23% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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