This chart suggests Big Blue is doing better than IBM stock critics believe

- May 14, 2017

BNL Finance analysts have been critics of Big Blue, otherwise known as International Business Machines Corp (NYSE:IBM), since 2012. IBM stock has been nothing shy of a great short sell, and a complete pain in Warren Buffett’s ass. Nonetheless, for all the doom and gloom reports, and IBM’s inability to re-establish revenue growth, many were starting to take bets on IBM stock as recently as January.

However, IBM stock has since fallen from a peak of more than $180 to $150. The cause is an illusion that the company has peaked, or has fallen back after getting within inches of turning the corner to year-over-year revenue growth. Importantly, I saw “illusion”, because based on the following chart, Big Blue might actually still be “on pace” for a recovery.

Two quarters ago International Business Machines Corp (NYSE:IBM) posted third quarter earnings that showed a year-over-year decline in revenue of just 0.28%. It marked the fifth consecutive quarter of accelerated growth, albeit a decline. In response, IBM stock trended higher.

Then, International Business Machines Corp (NYSE:IBM) produced quarters where revenue fell 1.3% and 2.8%, respectively. Clearly, that’s two steps back.

Problem is year-over-year performance can be misleading. The second and third quarters of 2015 were about as bad as it gets for International Business Machines Corp (NYSE:IBM). Therefore, IBM stock owners should have expected improved performance and near top-line growth in the same quarters of 2016.

Meanwhile, the fourth quarter of 2015 and the first quarter of 2016 was different. That was right in the midst of IBM’s recovery, which can be seen in the trend-line above. Consequently, the year-over-year period was more difficult.

That said, one look at International Business Machines Corp (NYSE:IBM) bi-annual revenue growth chart illustrates that the company is still trending in the right direction. By looking at the bi-annual performance you can often remove the element of a strong or weak quarter in the comparable period as a misleading factor.

Based on this specific chart, International Business Machines Corp (NYSE:IBM) is still trending in the right direction. Is it an illusion? Will IBM stall before crossing over to growth? Who knows, but for those taking strong bets against IBM stock based on the last two quarters, it’s very likely you will be sorry if the trend holds up. In our opinion, IBM stock is un-investable, an outlook that is certain to change one way or the other, soon.

This entry was posted in HADE Platform, Technology Bookmark the permalink.
RSS feed for this post. Post a comment or leave a trackback: Trackback URL.

Post a Comment

You must be logged in to post a comment.

Join the 100s Who Beat the Market with a BNL Membership

See What Current Members Are Saying

My Complete Access BNL Membership Includes

  • No contract. Guaranteed results. Cancel anytime.
  • Unrivaled Performance. The BNL Portfolio has outperformed the S&P 500 by 150% since October 1, 2015
  • Access. You know what goes in the BNL Portfolio, David’s Dividend Portfolio, and Eddy’s Options.
  • Alerts. You know when a trade is made in all three managed portfolios with application, text, and email alerts
  • Transparency. Verifiable trade records for the BNL Portfolio, David’s Dividends, & Eddy’s Options
  • Research. We have coverage on more than 50 companies
  • Results. Our 10 highest rated stocks outperformed the market by 134% last year
  • Live Chat. Join 100s of other members in an exclusive Members Only section with Chat
  • Growth. We are the fastest growing financial research platform in our industry.
  • Build My Portfolio. You give us your goals, we help you get there
  • Premium Content. Unlock hidden sections in each article. You also get Value of the Month selections and BNL Research Reports.
  • Community. We have professionals and beginners; retirees and college students; the 99% & 1%, but here, we are all equal.

Like what you see? Sign up for our newsletter and get the latest stock picks straight to your email!

%d bloggers like this: