IBM stock hits all-time highOctober 1, 2012: 2:13 PM ET
We live in a world where people wonder if relatively new companies like Google (GOOG) and Facebook (FB) have already matured. So it's refreshing to see that IBM (IBM), a tech company that just celebrated its 100th anniversary last year, is now trading an all-time high. Take that you young Silicon Valley whippersnappers!
Big Blue isn't growing as rapidly as many other tech companies. But its earnings are steady and dependable. Other struggling hardware companies like Hewlett-Packard (HPQ) and Dell (DELL) have tried, and so far failed, to emulate IBM's successful mix of tech's lucrative 4s's: software, services, storage and servers. There's a reason I keep referring to HP as "Little Blue" and "IBM Lite."
But can IBM keep impressing Wall Street? Several traders on StockTwits seem to think so.
Strong earnings form consulting firm Accenture (ACN) last week does probably bode well for IBM, which is a major player in tech services. And if IBM does dip anytime soon, it could wind up just being temporary. The stock, even at its all-time peak, is trading at just 12.6 times 2013 earnings estimates.
That's definitely reasonable for a company that analysts expect will post earnings growth of 10% a year, on average, for the next few years. Plus, IBM also pays a dividend that yields 1.6%. So you get an income kick as well.
That combination of solid earnings and safety is probably what attracted a certain well-known technophobe to IBM recently. The King of StockTwits reminded his loyal minions Monday that the Oracle of Omaha is an investor in IBM.
Finally, one trader noted that the rally in IBM could even be a good sign for the overall market.
I hope you are right. But there are some reasons to be concerned that the major market indexes are starting to look a little overheated.
Fortunately, it looks like new CEO and chairman Ginni Rometty has picked up right where her predecessor Sam Palmisano left off. She inherited a great company that is firing on all cylinders. So as long as the global economy doesn't grind to a complete halt in the next year or so, IBM probably will remain a solid investment for uncertain times.