International Business Machines' (IBM) stock performance befuddles me. While the rest of the large-cap technology sector continues to push higher and higher, IBM has been stuck in a rut. The stock price has again been pushed down to the low-end of its 52-week range (low-end of its 2-year range too). I consider this an excellent time to buy the stock for the following reasons:
- IBM continues to transform its business with its "Strategic Imperatives". This is modernizing IBM's business and is what will be the growth driver in the future.
- Given consistently strong free cash flow, IBM is able to return an unparalleled amount of capital back to its shareholders relative to other technology stocks.
- IBM currently trades at a rock-bottom valuation. My opinion is based on multiple approaches and consistent with Wall Street's expectations.
