Why IBM Remains More of a Value Trap

24/7 Wall St.

IBM LOGOInternational Business Machines Corp. (NYSE: IBM) is still deemed one of the most important technology stocks for investors because of its size and dominance in the Dow Jones Industrial Average. The new reality is that IBM is far less important on a relative basis than it used to be when you consider the number of other technology companies competing against it each day. Now Barron’s has featured it as a CEO Spotlight and cover story with a hope and a prayer that IBM’s turnaround may work.

What investors need to consider is that the IBM of today just cannot dominate its customers like it used to. The real issue for investors to have to swallow is that the only growth the company has is on earnings but not in sales. You can attribute all that growth in the quest for earnings of $20.00 per share to buybacks and cost cuts…

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By emoztar

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