2. International Business Machines Corporation (NYSE:IBM)
L2 Asset Management’s Stake Value: $1,309,000
Percentage of L2 Asset Management’s 13F Portfolio: 3.30%
Number of Hedge Fund Holders: 41
International Business Machines Corporation (NYSE:IBM) is a New York-based multinational technology company offering hardware, middleware and software, hosting solutions, on-demand services, artificial intelligence, blockchain, and quantum computing, in addition to multiple related products and services. L2 Asset Management, as of Q3 2021, holds a $1.30 million stake in International Business Machines Corporation (NYSE:IBM).
On February 1, International Business Machines Corporation (NYSE:IBM) declared a quarterly dividend of $1.64 per share, in line with previous. The dividend is payable on March 10, to shareholders of record on February 11.
Tigress Financial analyst Ivan Feinseth on January 28 reiterated a Neutral rating on International Business Machines Corporation (NYSE:IBM) and initiated a 12-month target price of $133. The analyst believes “intense” competition and a lack of major growth catalysts provide little opportunity for significant near-term share gains. With that said, International Business Machines Corporation (NYSE:IBM) “looks close to turning a corner, having reported the best sales growth in 10 years on strong cloud demand”, according to Feinseth.
In the third quarter of 2021, 41 hedge funds reported owning stakes worth $1.40 billion in International Business Machines Corporation (NYSE:IBM). Point72 Asset Management held a significant stake in International Business Machines Corporation (NYSE:IBM) in Q3, owning 1.60 million shares worth $223.4 million.
Here is what St. James Investment Company has to say about International Business Machines Corporation (NYSE:IBM) in its Q4 2021 investor letter:
“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)
