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 (NYSE: 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.
Armonk, N.Y. (1910)
IT consulting and other services
CEO Virginia Rometty (since January 2012)
Return on Capital (average, past 3 years)
$11.2 billion / $32.4 billion
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 91% of the 4,633 members who have rated IBM believe the stock will outperform the S&P 500 going forward.
IBM is a wonderful, consistent company at a fair price. My only concern is the [long-term] durability of IBM's moat due to being a tech company. Looks great for the medium term at least.
5 yr avg ROIC 18.7%, 5 yr avg ROE 59% ... [free cash flow]/sales% 15% (cash king). ... Reasonable debt level. [Dividend yield] around 1.6%
14x FCF, 14x P/E ...
I'm conservatively forecasting 12%-15% compounded returns, including reinvested dividends for the next 2-5 years. I got a feeling the S&P ain't gonna keep up with that.
If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, IBM may not be your top choice.
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