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If you like contrarian plays, one only needs to look at BlackBerry (BBRY) or Apple (AAPL) as examples of companies whose subpar 2013 performance turned around to make investors a lot of money this year. BlackBerry is up nearly48% for the year to date while Apple is up 38% at a time when the Dow Jones Industrial Average is up 9.1% and the S&P 500 is up 13%.
So why is IBM down 31% and Google off 3.4% for the same period?
First, IBM. IBM lost 3% of its value in 2013. While the company does pay a strong 2.7% yield, Big Blue has not fully established what it wants to be or how it plans to address the shift in corporate IT.
IBM can still boast about its profits, which have grown 4% over the past year. That's still impressive, given IBM's $160 billion market cap. The problem -- Wall Street no longer cares about that. Even though analysts project IBM to grow earnings per share at a rate of 8% in the next five years, the focus remains on the revenue side, which has declined 4.55% in the last year, leading to the stock declining of more than 16% over the past three years.
So what's going to change in 2015?
For these shares to rebound, IBM must figure out a way to become more relevant in the cloud. The industry is moving away from on-premise systems to cloud-based systems. Companies no longer want to manage their own servers on site.