(01-24-2016, 11:29 AM)divmenow Wrote:(01-24-2016, 10:00 AM)Kerim Wrote:(01-24-2016, 12:49 AM)divmenow Wrote:(01-22-2016, 02:28 PM)Kerim Wrote: Just added a little bit of IBM. I still think they are going to be fine long-term, and couldn't resist improving my average price per share.
Curious as to why you bought IBM? PC sales will be soft for a long time and they have a lot of competition in the cloud space. I get it. It looks cheap. Haven't seen these levels since 2009. Nice dividend of course but could get cheaper as the tech sector has been out of favor since early 2015.
It could indeed get cheaper, but my crystal ball is still broken, so I'm not going to try to time the bottom or turnaround moment. I liked it at $150 and $140, so I love it at $123 and yielding 4.2 percent. Yes, this company could be doomed, but I personally don't think so. They are still very profitable, even with revenues declining. And the "financial engineering" that everyone sneers at works for me. IBM is not a core holding for me, and I'll watch it much more carefully than my JNJ, and I understand that I could be wrong. But the best buys are when everyone else is negative.
Good answer and GL
And right on cue comes Tim McAleenan with some wisdom:
Quote:Now, it is almost certainly true that business performance at IBM–especially the 25% decline in revenues–has been worse than Buffett anticipated or desired. But, at a price of $122, it really does not take much to go right for IBM to work out as an investment. It makes $13.25 per share, for a P/E ratio of only 9.2. It still makes $13 billion in annual profits, putting it at one of the thirty most profitable firms in the entire world.
(I'm also going to copy this exchange into the IBM thread, where I think it might be useful.)
Just a little. I really like the international business...After their cut in the recession they acquired another huge operation, and since then they seem to be more conservative in keeping the dividend well covered by free cash flow. All those coffee cups ex-Starbucks...Someone has to get a piece of that, might as well be me