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IBM shares are down 12.7% YTD. Should I invest?

IBM shares are down 12.7% YTD. Should I invest?

IBM (NYSE: IBM) shares are advancing this November but the price is still not able to surpass $120 resistance level. IBM is expanding its business and the company has declared a $1.63/share quarterly dividend in October.

Fundamental analysis: IBM has declared a $1.63/share quarterly dividend

International Business Machines Corporation (IBM) is an American multinational technology company that employs more than 350,000 employees in 170 countries. IBM continues to be a major player in the IT business with the capability to enthuse investors in the years to come.

IBM posted better than expected results in Q3, revenues fell only 2.6% to $17.56B while Q3 Non-GAAP EPS was $2.58. This October, IBM announced it was spinning off the Managed Infrastructure Services unit into a new public company and this should be completed by the end of 2021.

With the market capitalization of $104B this stock is still undervalued relative to the market and maybe now could be a good time to invest in IBM shares. IBM has paid more than $16B dividends to its shareholders in the last three years and for now, dividend remains safe.

The company has declared a $1.63/share quarterly dividend this October which is in line with previous. IBM is expanding its business and according to the latest news, the company will acquire application monitoring company Instana. Instana will help to improve IBM’s hybrid cloud and the acquisition is expected to close within several months.

IBM also acquired recently TruQua Enterprises, an IT services and consulting SAP development. “Our acquisition of TruQua further strengthens IBM’s deep global expertise in finance and demonstrates our continued commitment towards supporting Chief Financial Officers’ strategic initiatives,” says Rahul Kalia from IBM.

Another useful information for potential investors is that IBM directors continue to buy shares this November and it is important to mention that retired Dow Chemical CEO Andrew Liveris has bought 2,655 shares at $112.92. Frederick Waddell has bought 1,000 shares at an average price of $107.50 while Sidney Taurel bought 5,000 shares for around $110/per share.

Technical analysis: As long the price is above $100 there is no risk of the “bear” market

IBM shares did not perform well so far in 2020 year but as long the price is above $100 this stock remains in the “bull” market. If the price falls in the upcoming months, every price in a range from $100 – $105 could be a very good opportunity for buying IBM shares.

Data source: tradingview.com

The important support levels are $110 and $100, $120 and $135 represent the resistance levels. If the price jumps above $120 it would be a “buy” signal but if the price falls below $100 it would be a strong “sell” signal and the next target could be around $90.

Summary

IBM posted better than expected results in Q3 and shares of this company are advancing this November. With the market capitalization of $104B this stock is still undervalued relative to the market and maybe now could be a good time to invest in IBM shares. IBM is expanding its business and according to the latest news, the company will acquire application monitoring company Instana. If the price falls in the upcoming months, every price in a range from $100 – $105 could be a very good opportunity for buying IBM shares.

The post IBM shares are down 12.7% YTD. Should I invest? appeared first on Invezz.

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