IBM's (IBM) stock continues to be depressed and trades at the bottom of its 52-week range (20% lower than just a few months ago). IBM's recent 2nd quarter earnings release hasn't helped matters. Revenue was down year-over-year for the 21st quarter in a row, off by more than 4 percent. However, it wasn't all bad news:
- IBM beat earnings expectations. Excluding certain items, IBM recorded $2.97 in earnings per share vs. $2.74 in earnings per share as expected by analysts.
- IBM reiterated its guidance of at least $13.80 in earnings per share for the full year of 2017.
- IBM's strategic imperatives continue to do well, which now contributes 45% of total revenue.
IBM has definitely struggled the last couple of years, but I'm confident in their strategic imperatives growth. This will achieve critical mass and return IBM to growth in the future. Given the recent price decline, I now think IBM's price is cheap enough to warrant buying the stock. I especially like IBM because there's multiple ways the stock provides a return on your investment. This includes a 4.08% annual dividend yield, large stock repurchases, and price appreciation potential.
