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No. of Recommendations: 16
IBM looks good to me, still, again, at $178.72.
Current run-rate EPS about $15.35.
Certainly discussed enough before, so this is just a reminder.
Heaven knows, not that many things are very compellingly priced these days.

I stumbled across the factoid today that US tech order growth is now its
fastest in 10 years, into double digits. Tech hours worked are rising rapidly.
Pricing power is actually rising.

I have Big Blue through well-in-the-money calls that I intend to roll at least once,
giving an optimistic target investment period of about 3.3 years.
Some of the higher strike ones include Jan 2015 $150 calls.
I bought a few more of those yesterday at $33.60 for a breakeven of $183.60/share and 5.3x leverage.
The roll from Jan 2015 to Jan 2017 should cost under a buck.
Total loss if the P/E goes much under 10x, of course.

Those figures above for price and earnings indicate an earnings yield
of 8.6% (=P/E of 11.6x) which doesn't sound too compelling.
But I think earnings will grow, so it's under 9x the forward-forward-forward earnings I anticipate.
My exit goal remains to wait for EPS to hit $20, which I expect by 2016,
then wait for the first day that the stock is trading at >=14x current run rate EPS.
That should give a profit of around $100+ a share, though it could be quite a few years.

Jim
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