Is IBM Stock Doomed?

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With shares of International Business Machines (NYSE:IBM) trading around $173, is IBM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

IBM is an information technology company. The company operates in five segments: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. Technology products and services are in high demand worldwide as consumers want to be up-to-speed, and companies always need the latest and greatest to stay ahead of the competition. Cloud computing has been hot in recent times, which has not been good news for IBM. Should the company want to hold on to its market share, it needs to make moves quickly, and provide the technology products and services that worldwide consumers and companies demand.

An IBM executive said that the company is still facing difficulties linked to a slow economy. Speaking at a Bank of Montreal conference in New York on Tuesday, Senior Vice President Erich Clementi said that IBM will continue to see falling sales figures unless the economy turns around, according to a report from Bloomberg. IBM’s revenue “depends on what the economic climate is, and that has not been very encouraging,” Clementi said. “Europe has shown signs of recovery. North America has been a little more uncertain.” Clementi added that the company is focusing most of its efforts on cloud computing and software over hardware.

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