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IBM trade ideas

I think you buy IBM and hold it for a decadeIBM dipped after its earnings report Friday and now sits at an important support level. While I'd love for it to dip to $110 or even $100 so I could place a larger buy order there, I have my doubts that it will dip that far. Dips have been hard to come by in this bull market. And while IBM had a disappointing quarter, executives forecasted that it will be back on track to sustainable revenue growth by the end of the year. For a technology stock, IBM is surprisingly inexpensive. I've currently got the stock's forward P/E at about 10.5, and forward P/S at about 1.4. Compare that to, say, Microsoft with a forward P/E over 30 and a forward P/S over 10. In addition to providing a good earnings yield, I forecast that IBM will yield 5.8% in dividends over the next year. Overall, I estimate that IBM has over 17% upside to its median price-to-value ratio of the last four years. The reason IBM is so cheap is that its EBITDA per share has been in a long, slow slide for the last ten years. For the last four years, EBITDA has shrunk over 1% per year. Sales growth over the last four years was barely positive, with a growth rate of 0.01%. However, I'm not convinced that these are the most relevant numbers. EBITDA is not a very good measure of profitability, and in fact its current popularity in the investment world is a bit worrisome. A better metric is IBM's free cash flow, which has grown about 0.5% per year over the last four years. And its dividend has grown about 1% per year. So personally I think the company has already turned a corner to the upside in terms of profitability. Plus, IBM has unusually good ESG ratings and generally positive market sentiment, with put/call ratios looking quite bullish and average analyst price target 15% above the current price. Most importantly, I think IBM has incredible potential as a technology leader. They've had more patents than any other company, by a wide margin, for 27 years running. They're averaging 82 patents per year per billion dollars of market cap, which means you're buying an incredible amount of cutting-edge technology for the price you pay. Of the companies I follow, the next best value in terms of patents-to-market-cap is HPE, with just 26 patents-per-year-per-billion. And IBM's patents are in potentially world-changing fields, like AI and quantum computing. This is by far the best value in the market for a Singularity technology play. And that, more than anything else, is why I think you buy IBM here and hold it for a decade. IBM has crossed into the lower half of its ten-year triangle and has fairly good risk-reward within the triangle from here. Assuming it eventually breaks out of the triangle to the upside, I'd expect it to eventually recapture its 2012 highs over $200 per share.
NYSE:IBMLong
by ChristopherCarrollSmith
14
Long Term Trendline!We have a downward trendline from the 2013 all time high. It has been a downward spiral since then. We recently hit it again and we might retreat...Note i say might. April's candle was pretty strong,in fact even March's candle was stellar as well. with volume.So this is really a counter momentum (short term) trade i am attempting although long term is in line with descend we have been seeing since 2013. As such my position size will be smaller than usual. Entry: 141.88 TP: 124.66 SL: 149.07 R: 2.39
NYSE:IBMShort
by taftrader
Inverse Head and Shoulders Rising Wedge?Possible bearish rising wedge. I am not sure but there is also a possible bull flag as well. I have noticed a bull flag will often take a security through the bearish rising wedge and then recover. If so, this would take price back down to long entry level for the inverse H&S bottom, or possibly lower. Rising wedges are usually bearish, well almost always bearish. They form due to overactive buying and can be very long term patterns. They are not valid unless lower trendline is broken. A strong stock may not fall far and will seek a level of support within the wedge. A rising wedge has 2 trendlines that converge at the apex. Not a recommendation. RSI is not overbought or oversold and a flag like structure is forming there as well. Leading indicators are a heads-up for economists and investors who hope to anticipate trends. RSI is considered a leading indicator. Leading indicators react to prices quickly, which can be great for short-term traders, but makes them prone to giving out false signals. Lagging indicators can only be known after the event, but that doesn't make them useless. They can confirm trends and what has been occurring over time. Analysts are a lagging indicator (o: The MACD is a lagging indicator when trading on the crossovers, it is more of a leading indicator when it is used to highlight possible overbought or oversold conditions.
NYSE:IBM
by lauralea
2