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.


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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.

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