IBM Common Stock (IBM)

This is one of the few tech companies that is “on sale” at this time.

Sentiment is very low and it has underperformed recently. It is not the old hardware business. Mostly it is software and the cloud. They are investing in growth areas. Revenues are starting to grow again. He thinks there will be a significant rerating of the stock. The PE is only 10 times. (Analysts’ target: $166.67).

What tech stocks have growth and pay 4% dividends? Cisco which is trading around $42. He owns it. Pays a dividend above 3%. IBM (he doesn't own it) who are turning it around. Right now in the low-$140's is a good time to buy it.

This is a range trading stock, where you can buy it in the $140s and sell it in the $160s. Their AI business is good, but they have a lot of legacy hardware that acts like a ball and chain. He tends to range trade this only.

He would be a buyer here, although it is not his highest rated pick. There are a lot of growth drivers, but it needs new leadership to consider breaking this into separate entities. It is only 11 times earnings and has a good dividend yield.

The way they have grown earnings is by buying back shares. The top line hasn’t really grown. For what they have you are better off in a Microsoft (MSFT-O) or a Google (GOOGL-O).

He'd like to like IBM now. Corporate America will be spending more on IT, but IBM's challenge is with Microsoft and Google fighting them over the Cloud. They missed earnings today. Watch this, but don't aggressively buy now.

His own research indicates they're playing accounting games with discount rates for their pensions as well as share buybacks. So, he won't touch it. Offers a little growth, but not price appreciation unlike with software companies.

This has struggled in terms of growing their top line. Warren Buffett had a big position and has since trimmed it. This might have been a bit of an ROE trap. They might have been slow to adjust to the new technological landscape. It has gone basically nowhere over the last 10 years. There are a lot better opportunities in the Tech space.

IBM (IBM-N) or Microsoft (MSFT-Q)? Doesn't own either, but of the 2, Microsoft is the safer name to own. They are much deeper into their turnaround. The theme with Microsoft has been Cloud, Cloud, Cloud.

She has not held this name, because it got so large it couldn't really grow its top line anymore. They managed to grow the bottom line by buying back stock. There is not a lot of growth in this. They’re trying to change that through acquisitions, and that will take some time. You typically buy technology stocks for growth, and she feels there are more attractive growth companies than this one.

This has a monopoly position with a story similar to Microsoft. The only difference is that this one is effectively what Microsoft is ultimately going to become, i.e., they buy back shares about 2%-3% per year and have done that for about 15 years. Have raised the dividend every year. A total return story, capital appreciation plus the dividend. At the moment it is fairly inexpensive and is actually on sale. If you have a multiyear time horizon, its an interesting way to play tech. Very, very strong balance sheet.

(Market Call Minute.) This company is tying their wagon to artificial intelligence. The stock has come off its lows of August, and the jury is still out. He would be a "solid neutral" on this.

An old tech company that is undergoing a significant transition. Ultimately, they are going to be successful. It may take another year or so of flattish earnings, but after that they are really going to hit their stride with their software and services offering. Shares are very cheap, trading at 11X earnings.

Artificial Intelligence is something that almost everybody is interested in. This company is in that business. They made their bones as the first big hardware company when mainframes were the thing. Also invented the PC. In recent years, this has become a software company, almost like a utility in terms of managing existing infrastructure.