IBM Common Stock (IBM)

Feels their best days are behind them. What we want to do with technology right now, is find companies that are implementing technology to increase margins. The period of time when you invest in technology companies is over.

A good company, but to him it is too big. They have so many lines of business, and are trying to switch more into software as a service business as opposed to a hardware business. It has been a difficult transition for them. He would prefer other names in technology.

(A Top Pick June 13/16. Up 5.83%.) This is a long term holding. She sees them executing in a lot of their changing, going from more consulting services, cloud computing, mobile services. Has an attractive dividend yield.

(Market Call Minute.) OK, but in technology he would prefer other higher growth companies like Alphabet (GOOG-Q).

It is starting to act better, but in a long term chart it is a serial destroyer of capital. He is not a fan of share buybacks.

(Market Call Minute.) The biggest mistake you can make is buying companies in technologies that are not growing.

A tough company to like. It has come down quite a bit, but have been spending a lot of money on buying back stock, rather than investing in their business or paying out more dividends. He is not a fan of companies in love with buying back their own stock.

One of her favourites for just being a very defensive company. Also, one of the companies she views as being a turnaround. They have “Strategic Initiatives”, which means they need to get more revenue from mobile, cloud and security. They’ve been doing that, and about a 3^rd of their revenues comes from these higher growth areas, instead of the traditional PC sales. Trading at 11X forward earnings. Dividend yield of 3% and have a strong share repurchase program. Even though there are declining revenues for this year and flat for next year, looking 2-3 years out, she sees a big ramp up in this pay off of turning things around.

(Market Call Minute.) Grew by cost cutting, which is a finite process. You can grow revenues to the moon, but you can only cut costs so much. It finally caught up and the stock rolled over. There are better opportunities elsewhere.

It seems to be turning the corner. Older tech, but older tech with a little bit of promise. This is a name you could hold. It is relatively defensive with not a lot of downside. It has the potential of boosting profitability through its consulting arm.

He would like to like this one, but it does not ever come through with what it says it will. It has spent too much money buying back its shares. He does not like companies that do that.

Has suffered in recent years, but what they are doing is constantly buying back stock, so they are shrinking their balance sheet as their earnings come down. His model price is $148.94 so still has an upside of 7%.

IBM (IBM-N) or Oracle (ORCL-Q)? Not a fan of either. If looking for a dividend play, this one pays a much nicer one, close to 4% versus 1.5%. Growth rate is pretty weak. Still moving away and facing challenges from moving away from its old school legacy type of slower growth businesses to the faster, trendier things like the Cloud. Technicals don’t look very good for either. Would prefer Microsoft (MSFT-Q).

It has had decelerating revenues for many years. Earnings have held in only because of massive buybacks they do every year. It is a classic value trap. He would switch within the tech sector to something with more growth.

A very good example of old technology versus new technology. It appears cheap from a fundamental level, trading at 9X on a forward basis and 8X on a trailing basis. The growth rate is the issue. There is a lack of confidence that this company can transition from more of its legacy technologies such as software, etc., to more of the analytics, the cloud, mobile and security.