Each week, I’ll give an overview of a stock and Licia Leslie will follow that up with a chart analysis the next day. Bill Griffo will chime in with macro analysis and Andrew Giovinazzi will then finish out the week with a volatility breakdown.

Have a stock YOU want us to review? Email my team here. – Mark

Hey Traders,

International Business Machines Corp. (Ticker: IBM) reported earnings this week and although revenues were a tough lower they reported an earnings beat …

Big Blue was able to strengthen its margins, which is not easy in today’s environment, but for IBM they still have a bit of pricing power.

IBM offers investors a competitive advantage and today we’ll take a deeper dive …

Good Time to Buy IBM

For long-term investors now is a good time to buy IBM … They offer a great dividend, which will add  5.22% to your portfolio …

But better than that is IBM is a safe investment and today that means as much as the return on their dividend distributions. 

5.22% is higher than you can earn on US government bonds and guess what … IBM may be a safer investment than US Treasury bonds. 

Especially today, with the impending debt ceiling crisis PLUS very large government deficits for the foreseeable future IBM will be a long-term winner from investor money flows.

Stock Fairly Priced

IBM is sitting at its 2-year high volume price and right on morningstar’s fair value price of $126.

Notice the chart below illustrating an over 17% drop from the highs.

 

If you don’t own IBW as a long-term holding, now is a good time to buy. You can use a dollar cost averaging strategy.

Interest rates on bonds will not be here long and when they begin to fall you will be glad you did. 

Live a Trade With Passion my Friend,

Griff