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No. of Recommendations: 2
IBM started around $130's and ended around $130's. This is during a decade where cloud, big data, AI all exploded. The only saving grace is the dividend.

Just contrast this performance with AMZN, or MSFT you will see the difference of who won the technology war. The important lesson for investors is, in my opinion, if the underlying business is not doing good, then the stock is not going to do good, you can trade in and out, but long-term it will be a poor investment.
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No. of Recommendations: 2
I am continuing to accumulate while collecting 5% dividends. My patience is being tested. I have low expectations.

10PE, 5% Dividends, retired large number of shares, Jettisoned low margin businesses, Multiple revenue streams (Cloud, AI, Consulting, Software), Global footprint.

I am hoping that Ginny will take a victory lap and hand over to Whitehurst in next few quarters and he injects a culture shock in IBM.
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No. of Recommendations: 7
" I am continuing to accumulate while collecting 5% dividends. My patience is being tested. I have low expectations.

10PE, 5% Dividends, retired large number of shares, Jettisoned low margin businesses, Multiple revenue streams (Cloud, AI, Consulting, Software), Global footprint.

I am hoping that Ginny will take a victory lap and hand over to Whitehurst in next few quarters and he injects a culture shock in IBM."

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You may want to dig deeper. IBM has lost the cloud. AWS, Azure and either Google or one of the leading Chinese firms will have the share. IBM overpaid for Redhat and has suspended repurchases.

The case for hybrid and Redhat's competitive advantage is way overstated. Look at the pace of innovation at AWS and Azure. The DOD win for Azure is huge. AWS had the only other technically qualified cloud.

IBM's GTS business is in decline due to the migration to off-prem and commoditization of infrastructure services. The numbers don't lie. Ginni recently removed the leader of GTS in the hopes of igniting growth.

Watson for AI is not meaningful. Google , Amazon and Microsoft have superior offerings.

The consulting services business (GBS) is ok but not as strong as Accenture.

IBM has a jewel in their mainframe business and the growth is actually quite impressive given the installed capacity despite calls for the death of the mainframe.

Their Power systems business is ok but not material. China has stated a goal of NO US tech dependence.

IBM's software portfolio is weak. The Oldsmobile of today.

Not impressed with Whitehurst. Narrow. I don't think he will get the reigns.
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No. of Recommendations: 0
I have low expectations.

Actually your expectations are pretty high. The cloud war is going to be dominated by 3+1 US players (AWS, Azure, and Google), Oracle gets also run, and lots of SaaS players. IBM is not going to be the generic cloud platform and has no meaningful products to compete in the SaaS market.

Lot of leading tech minds consider IBM's AI Watson a joke and clearly it has not gained any traction and IBM's software will die along with the data center migration to cloud.

I am hoping that Ginny will take a victory lap
Victory lap??? Are you serious?

Separately, PE is meaningless, if nothing else you should have learned this lesson by now. Remember, IBM's earnings (Net profits) have come down more than 50% and still there is no light at the end of the tunnel.
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No. of Recommendations: 4
Here are the numbers and the reason why I am accumulating IBM shares.

Metric		IBM	Accenture	Workday		Salesforce	Oracle
-------------------------------------------------------------------------------
Market Cap 	$118B	$133B		$38B		$147B		$173B
Revenue: 	*$77B	$43B		$2.8B		$13.2B		$38B
PE Ratio(F): 	10	26		93		57		13
Net Income: 	*$8.7B	$4.7B		-0.4B		$1.11B		$11B
Dividends: 	4.78%	1%		0		0		1.7%
Debt:		$45B	$22B		$1.2B		$3.17B		$56B
Retired Shares: -31%	-4%		18%		24%		-17%	
* Revenue and Income don't have Redhat numbers


IBM and Accenture compete in Consulting
Oracle and IBM compete in Cloud - similar boat, similar story
Workday, Salesforce are SaaS providers - 
this is for reference to show that these "hot" companies would kill for IBM's revenue and profit numbers.

I agree that Amazon, Microsoft and Google are in a different league.
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No. of Recommendations: 0
IBM and Accenture compete in Consulting

Accenture has managed its consulting far better than IBM and IBM's consulting is primarily focused on hosting based, GTS.

Oracle and IBM compete in Cloud - similar boat, similar story
Totally wrong. Oracle has database, middleware, and various software that goes with it, and it also has installed base of enterprise applications like Oracle E-business Suite, PeopleSoft, JDEdwards, Siebel, NetSuite and various tug-in applications.

IBM doesn't have application portfolio anywhere near Oracle. Just to be clear, I think Oracle is mightily struggling with their cloud approach.

I am not sure workday or service now even want to be compared with IBM on any metrics.

IBM's problem is, it will leak revenue and profits at least another 3 years (I don't want to go beyond that). I don't see a turnaround for them.
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No. of Recommendations: 0
When you call something "the lost whatever" it implies a flat spot on an otherwise improving trend. That is NOT the case with IBM. IBM = yesterday's technology company.

There is always TOO MUCH of YESTERDAY's TECHNOLOGY.

YESTERDAY's TECHNOLOGY Companies don't really come back.
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"Metric IBM Accenture Workday Salesforce Oracle"

It is always fun watching people who don't really understand technology companies comparing technology companies.
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No. of Recommendations: 1
https://seekingalpha.com/news/3532893-ibm-q4-2019-earnings-p...

IBM (NYSE:IBM) is scheduled to announce Q4 earnings results on Tuesday, January 21st, after market close.

The consensus EPS Estimate is $4.69 (-3.7% Y/Y) and the consensus Revenue Estimate is $21.62B (-0.6% Y/Y).
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No. of Recommendations: 0
anyone notice IBM commercials during NFL games? What is that about? Is that the single most inefficient use of ad $s ever? Maybe a bunch of NFL fans will pony up for Watson-cloud-time to make their fantasy football picks? oh boy. ibm. smh
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No. of Recommendations: 3
The consensus EPS Estimate is $4.69 (-3.7% Y/Y) and the consensus Revenue Estimate is $21.62B (-0.6% Y/Y).

IBM up on strong earnings report

https://www.cnbc.com/2020/01/21/ibm-earnings-q4-2019.html

• IBM (NYSE:IBM): Q4 Non-GAAP EPS of $4.71 beats by $0.02; GAAP EPS of $4.11 beats by $0.03.
• Revenue of $21.78B (+0.1% Y/Y) beats by $160M.
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Do you think the acceleration of RedHat revenue under IBM sustainable?
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No. of Recommendations: 2
Do you think the acceleration of RedHat revenue under IBM sustainable?

I am not sure.

IBM and RedHat synergies are good with Rhel, OpenShift
and IBM gives it immediate reach to 100x customer base.
They are also leveraging their GBS and GTS to drive "hybrid" strategy.
However, I am not sold on "hybrid" story yet, but the risk is low.

I do feel that market undervalues IBM's reach, installed foot print
and relationships with enterprises and governments in over 170 countries.
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No. of Recommendations: 4
IBM up on strong earnings report

https://www.cnbc.com/2020/01/21/ibm-earnings-q4-2019.html

• IBM (NYSE:IBM): Q4 Non-GAAP EPS of $4.71 beats by $0.02; GAAP EPS of $4.11 beats by $0.03.
• Revenue of $21.78B (+0.1% Y/Y) beats by $160M.


Rev up .1% Y/Y is what we're calling strong earnings report now? I think there is a saying about low expectations.
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No. of Recommendations: 2
Rev up .1% Y/Y is what we're calling strong earnings report now? I think there is a saying about low expectations.

IBM had $2B of divestitures in 2019. Margins expanded and will expand further in 2020. Details matter.
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In other words, headline numbers don't give all the picture, that is very true for IBM. All these years, the headline numbers will show growth, which you have to dig deeper to find there is no growth. For a change, some segments of the company are (actually it should be is but then...) growing.
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No. of Recommendations: 1
Interestingly, Berkshire would have been $1B - $2B richer today staying with IBM,
despite the decline in IBM stock price had it stayed in IBM instead of moving its money in cash*.

IBM has returned quite a bit of money back to the investor in dividends and share buy backs over the 9 years.

* not confusing with this with the Apple investment
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No. of Recommendations: 2
"IBM had $2B of divestitures in 2019."

Hmm, I seemed to recall that they also had an acquisition….. one you are ignoring.

"Details matter."

Yes they do. Unfortunately you seem to think you can pick and choose which details to highlight and ignore.
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No. of Recommendations: 1
Neither conflating nor pretending are interesting.

WEB's decision to hold stupid amounts of cash has nothing to do with IBM.

Over the last 3 yrs, IBM stock is DOWN, while BRK's stock portfolio is up prob >30% & BRK's bond portfolio (the part with decent duration) is prob up about 30% also. IBM has been & still is a disaster. MOst "tech stock for people who know nothing about tech stocks" turn into disasters sooner than later.

Stop pretending. Face reality.
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No. of Recommendations: 1
I am hoping that Ginny will take a victory lap and hand over to Whitehurst in next few quarters and he injects a culture shock in IBM.

Right on money regarding the timing. Wrong on the name.

IBM names Krishna CEO as Rometty steps down; shares +3.9%

https://www.bloomberg.com/news/articles/2020-01-30/ibm-names...

Arvind Krishna is an IBM insider.
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Right on money regarding the timing. Wrong on the name.

Well, yes, but Whitehurst will now be President, so the Red Hat influence will still
be front and center.
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No. of Recommendations: 1
Arvind is an excellent choice. I am glad IBM chose an insider and particularly Arvind. Perhaps, it is time to buy IBM.
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but Whitehurst will now be President, so the Red Hat influence will still be front and center

Arvind is younger than Whitehurst and represents IBM's culture, and brings IBM's technical innovation, etc.

While Whitehurst promotion to President provides a strong bench, if Arvind is successful I expect in time Whitehurst will move on.
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Wrong on the name ... Arvind Krishna is an IBM insider

My expectation is Arvind will focus on growth, not on financial engineering or coming up EPS targets and trying to meet it, etc. If he refocuses the company on growth, then you should expect mild EPS decline and simultaneously multiples expansion. of course, he is not starting now but in April, and not sure when we will get to hear his vision and plans for the growth and the company.

IBM is better served by Arvind's leadership than an outsider Whitehurst.
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Arvind needs to cut dividends, perhaps borrow more money

1. Put money in enriching IBM cloud rapidly.
2. Accelerate on-boarding its existing global clients to IBM cloud and not escape to AWS/Azure.
3. Leverage its hybrid / on prem / multi cloud Redhat strategy
4. Financial cloud is a great initiative. Raidly develop custom cloud for regulated industries with all regulations in built for Pharma, Insurance, Energy etc.
5. Perhaps make a play to acquire GCP. Not a right fit for Google.

Leverage its mighty GBS/GTS and client relationships across 170 countries.
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Arvind needs to cut dividends, perhaps borrow more money

IBM still throws of tons of money, and remember they have paid back $10B of debt they borrowed for RedHat, in 3 quarters. I think IBM has sufficient cash flow to invest and do M&A. If required they can borrow. I don't think they will cut dividend, hopefully they may not raise it or slow walk the raise.

Put money in enriching IBM cloud rapidly.
Accelerate on-boarding its existing global clients to IBM cloud and not escape to AWS/Azure.


IBM's hybrid cloud is an interim attempt at stop the bleeding. The endgame is clients will go to AWS/ Azure, and IBM's of the world will build value added solutions and service on top of that. Industry specific solutions, or solutions that involves their IP.

Perhaps make a play to acquire GCP. Not a right fit for Google.

Whaaat??? GCP is a strategic asset for Google, and you think Google is going to sell it? Take a second and realize, the Hadoop, Apache, and so many big data, AI, machine learning originated from Google. Now instead of Open Source they will go straight to GCP. GCP may be a 3rd in cloud platform, but it is a significant platform with a staying power, far greater than IBM's.

I would conservatively value GCP is worth anywhere between $150 to $200 B. Let us assume suddenly google decided to sell it, do you think IBM can afford such a price tag?
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Whaaat??? GCP is a strategic asset for Google, and you think Google is going to sell it? Take a second and realize, the Hadoop, Apache, and so many big data, AI, machine learning originated from Google. Now instead of Open Source they will go straight to GCP. GCP may be a 3rd in cloud platform, but it is a significant platform with a staying power, far greater than IBM's.

I would conservatively value GCP is worth anywhere between $150 to $200 B. Let us assume suddenly google decided to sell it, do you think IBM can afford such a price tag?


Yeah, I agree. Not going to happen.

However, GCP is floundering. Google has been trying to revive it for more than 5 years now without success. AWS and Azure and pulling away.
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No. of Recommendations: 1
Google has been trying to revive it for more than 5 years now

I think with Thomas Kurian's hiring as CEO Google is prioritizing GCP, let us see.

Now, as I think more about IBM, I think the sins of the past decade is going to continue to hurt IBM. IBM missed the initial growth phase, and now, they have $36B debt from RedHat acquisition and pretty much they don't have anything else to sell and raise cash, and it is going to take them at least 2 or 3 years to bring their debt down and start making additional acquisitions, and their current portfolio is not going to help them make any meaningful re-positioning.
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However, GCP is floundering

Google Cloud is doing $10B run-rate and growing 53% annually. You call this floundering???
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If I were to guess, large part of the growth is coming from Google.
Google and YouTube compute and data needs are growing exponentially.

GCP($9B) is still < 50% of IBM cloud revenue (~20B). Yes, it is still floundering.
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GCP($9B) is still < 50% of IBM cloud revenue (~20B)

Are you kidding? Seriously? IBM, counts anything that starts with the letter "c" as cloud revenue. IBM's true cloud revenue is more like $4 B and when you include RedHat it is still around $8 B. You need to really look into what IBM counts as "cloud".

BTW, GCP doesn't include Google's into GCP Revenue.
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