March 16, 2023

IBM: Obermatt ventures into the US for good sentiment

IBM: Obermatt ventures into the US for good sentiment

As Obermatt’s guest investors and Dr. Hermann J. Stern constantly add new stocks to the Obermatt Wikifolios, venturing into new markets was imminent. Hence, we start our USA Wikifolio with IBM and here is why.

The “coffee chat sentiment” was strong for IBM as it was the first employer of one of the guest investors of the Obermatt Zoom Coffee Break chat from March 9, 2023. There were memories and nostalgia - many love their first employment. On the rational side, IBM’s Sentiment Rank (by the professionals) is green, meaning that the market and professional investors see the investment positively. The “sentiment” was strong within Obermatt as well, as IBM is the go-to stock for most of us when we test the website changes and the ranks. It was about time we visited it in our Insights.

PRO: The following three points speak for a buy:

  1. Obermatt Ranks for IBM are very good, especially the Value rank at 95, making it cheaper than 95% of its competitors. This is high, considering the hype of the information technology industry. Also, their 360° View is at 78, an amazing all-around position within the competition.
  2. Over the years, IBM has transitioned significantly. After they sold their consumer electronics departments, they focused on developing new technologies. Artificial intelligence and machine learning are IBM’s promising areas of activity.
  3. Their recent partnership with EY in the field of sustainability is a good move for the future.

CONTRA: The following three points argue against it:

  1. IT is not an industry we usually endorse for investing. It is either expensive or not very safe as technologies change quickly, and some of them are not able to adapt quickly enough. Also, recent layoffs across the industry and the general instability have made us think twice before choosing this company.
  2. IBM may not be the most exciting company to invest in, as they are primarily still a legacy tech giant, but on the other hand, that also makes it safer.
  3. IBM’s Obermatt Safety Rank is in yellow at 34. Leverage and refinancing have been worse in previous periods. So, we believe that their debt management may be reasonable.

Our guest investors believe IBM’s pro points outweigh the cons and decide to buy IBM shares for the new US Obermatt Wikifolio. Invest in our Wikifolios and participate in the Zoom Coffee Break stock discussions: hang out with experienced investors and learn the tips and tricks for your investments.

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