IBM!?

[DividendGarden]

I picked up some more IBM. I know that they are struggling as a company with their top line and other issues, but on a per-share basis, things keep improving, which should be beneficial for future dividend growth.

[rapidacid]

IBM axing over 100,000 workers

http://www.itworld.com/article/2875112/i...yoffs.html

Quote:IBM is expected to go through a massive reorg next month that will reportedly see 26% of its 430,000-strong work force let go, or 111,800 people. If that figure holds true, that would make it far and away the largest corporate layoff event in history, breaking the record previously held by IBM, when it cut 60,000 in 1993.

[TopRamenTrader]

Was at CES and seen some cool stuff from lenovo/ibm but nothing that blew my mind. the yoga is a solid machine its just damn pricey. Im more interested in their partnership with apple.

do you think the axe will put more money in the pocket or cause them to fail due to lack of maybe man power/ support for their cloud and business solutions.

Also is this a result of the apple team up, trying to reduce some of the redundancy?

almost at the 52 week low.

should be safeish right? Also what price are you guys sending those buy orders at? im still struggling to see what i can get away with lol

[Main Street Stock Investor]

Kerim, Based on your discussion above, it appears you really want to own this stock. IBM is in the dividend achiever category and that fact is a big plus. I would take this approach with IBM. Consider it a speculative holding for now, limit your investment to 1-2% of your portfolio as you feel comfortable, purchase a 1/3 or 1/4 position initially and build from there, trade occasionally and take some profits and build the position slowly. I'm long IBM, but it is only 1.2% of my portfolio. I have been building a position since 2010 and will continue to add to the position, collect dividends, and profitably trade at opportune times. A very conservative approach, but it works for me.

M$$I

[Kerim]

(01-21-2015, 11:41 AM)EricL Wrote: I agree. I am overweight after my most recent purchase in December so won't be adding anymore, but this looks like a great opportunity to get in. Yield is up to nearly 3% now and there should be another announced dividend increase in April.

Indeed -- and it was a doozy of an increase! From $1.10 per quarter to $1.30. As is often the case, wish I had bought some more. Q1 earnings were not stellar, but not too bad either.

[Kerim]

So here is part of the counterintuitive magic of dividend growth investing:

I bought my first shares of IBM in October 2014 and January 2015, at prices of about $162 and $157, respectively. And I caught myself thinking this morning, as I mentioned before, that I wished I had bought a little more -- with the price over $170 at the moment.

But as a DG investor, it is important to consider the cost that I am paying for the income stream. With today's dividend increase announcement, and a new yield of over 3 percent, IBM is cheaper now than when I bought previously -- relative to the income stream it generates. Those earlier purchases were at yields of 2.7 and 2.8 percent or so.

[DividendGarden]

(04-28-2015, 09:57 AM)Kerim Wrote: But as a DG investor, it is important to consider the cost that I am paying for the income stream.

Excellent point, Kerim.

[Kerim]

IBM is hurting today! Down over 5 percent to $163.75 at the moment. That is not as low a price as you could have had it late last year or even earlier this year, but it does represent a solid value (relative to the income stream) given the very solid dividend raise this year.

Anyone feeling brave?

[EricL]

(07-21-2015, 10:50 AM)Kerim Wrote: IBM is hurting today! Down over 5 percent to $163.75 at the moment. That is not as low a price as you could have had it late last year or even earlier this year, but it does represent a solid value (relative to the income stream) given the very solid dividend raise this year.

Anyone feeling brave?

I'm already overweight so not adding anymore myself, but have no intentions of selling any of it either.

[Roadmap2Retire]

I have been critical of IBM in the past and I stand by it. Its a financial engineering company that has resorted to ballooning debt and buying back shares to prop up the EPS numbers. Revenue's been falling for 13 straight quarters, net income down, profit margin down, debt of $38B, dwindling cash reserves - down from $12B a couple of years ago to $8.8B this quarter.

Im just watching IBM from the sidelines with my bag of popcorn. Im surprised no one has called for Rometty's head yet.

The only bright spot is the cloud business -- im sure an activist investor will call for it to be spun off....but then again, activist investors dont go after bad companies in order to fix it, they go after good/great companies, create a lot of media hype, shake some branches, grab the low hanging fruit and leave.

[Kerim]

(07-21-2015, 11:34 AM)Roadmap2Retire Wrote: I have been critical of IBM in the past and I stand by it. Its a financial engineering company that has resorted to ballooning debt and buying back shares to prop up the EPS numbers. Revenue's been falling for 13 straight quarters, net income down, profit margin down, debt of $38B, dwindling cash reserves - down from $12B a couple of years ago to $8.8B this quarter.

I certainly can't deny any of that, but just to play devil's advocate....

IBM is still highly profitable and generates a ton of free cash. Yes, those numbers have been consistently declining, but it seems like IBM could keep the "financial engineering" up for a long time to come still, which could make it a lucrative dividend play even today. And if/when they do get revenues stabilized, or even increasing again, this might have been a unreal opportunity...

I'm going to take a much closer look at this one in the coming days...

[ChadR]

If I wasn't already sitting on 18.4 shares of IBM, I would be buying at this price. It's already at as much as I want to buy of it. Though it is really hard not to buy more.