4-Star Stocks Poised to Pop: IBM

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, global IT solutions giant International Business Machines (NYS: IBM) has earned a respected four-star ranking.

With that in mind, let's take a closer look at IBM's business and see what CAPS investors are saying about the stock right now.

IBM facts

Headquarters (founded)Armonk, N.Y. (1910)
Market Cap$220 billion
IndustryIT consulting and other services
Trailing-12-Month Revenue$106.4 billion
ManagementChairman/CEO Samuel Palmisano CFO Mark Loughridge
Return on Capital (average, past 3 years)24.7%
Cash/Debt$11.3 billion / $30.2 billion
Dividend Yield1.6%
CompetitorsEMC (NYS: EMC) Hewlett-Packard (NYS: HPQ) Oracle (NAS: ORCL)

Source: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 90% of the 4,317 members who have rated IBM believe the stock will outperform the S&P 500 going forward. These bulls include All-Star poppycock2 and divinezone.

Earlier this week, poppycock2 tapped IBM as an outstanding Oracle of Omaha-owned opportunity: "[Warren Buffett's] on board now which should portend good things for this solid company. Companies will continue investing in IT because they really have no other choice in order to remain competitive."

In fact, IBM's three-year average return on capital of 24.7% easily tops that of tech rivals such as EMC (7.7%), HP (12.8%), and Oracle (14.8%).

CAPS member divinezone elaborates on the bull case:

It seems as if IBM is going through a new stage in terms of the culture and image of its business. Over the past few years, as I see it, it has gained a "cooler" feel to the company, and creative, quirky endeavors such as the Watson Jeopardy extravaganza are a prime example of what I'm talking about. Its advertisements are pervasive and effective, and it has some of the smartest engineers and developers in the world working for them.

What do you think about IBM, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackIBM?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of IBM, EMC, and Oracle. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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