Media Appearance: Power Lunch (10/17/06)



Earlier this year on Powerlunch, I spoke positively about IBM. SInce they are reporting tonite, CNBC’s  Power Lunch wanted to discuss the company. So that’s what I am doing about 1:40pm today, with Sue Hererra.

There are 5 things about IBM you should know:

1. IBM has beaten earnings by low single digits for the past 5 Qs

2. Relatively Cheap 16 trailing earnings vs. 23 for the Dow, and close to 25-30 for a lot of large software names

3. Even though software is only 20% revenue, its about 40% earnings

4. Huge Patents:  IBM Leads in U.S. Patents for Thirteenth Consecutive Year; This is potentially a rich pipeline for the company in the future. They currently garner about $1Billion a year in (high profit) revenue from licensing their patents.

5. They are a Large Cap Defensive name that should do well in any downturn


UPDATE:  October 18, 2006  9:45am

IBM had very good numbers, ansd is up about $5 bucks this morning.


What's been said:

Discussions found on the web:
  1. brian commented on Oct 17

    Nice interview Barry!

  2. Chief Tomahawk commented on Oct 17


    I’ve had the tube on CNBC but the sound on mute for the last 20 minutes. PC faces the wrong way…

    Might you post a link to the feed please?

  3. loge commented on Oct 17

    BR…..where was the sweater ??????

  4. DD commented on Oct 17

    good call b….

  5. Eclectic commented on Oct 17

    Excellent sense of timing you had there! Hope you made a mint.

    Reach around and pat your curmugeonly self on the back!

  6. Adam Coleman commented on Oct 17

    Nice call Barry, up 5% after hrs

  7. BDG123 commented on Oct 18

    Personally? I agree that I’d rather own monster caps in a downturn but I believe IBM has a chance to fall well below its 2002-2003 low if we have a correction to purge the system. It’s trading at 4x book with nary a dividend. A miniscule dividend that falls to even more miniscule levels every day it goes up making it one of the greatest gambles of the century.

    You aren’t the only worry wart left………..

  8. BDG123 commented on Oct 18

    A high probability IBM is up because players are gaming the options market to drive the Dow to 12K. The options market pre-announce pointed to a high probability this would happen. The earnings s*cked and were close to flat if you take out the tax charge which makes earnings look better than expected. Services revenue, which is their golden lamb of growth was essentially flat to down with constant currency and revenue was marginally up on constant currency.

    Let’s see the price hold and continue upward. Then I’ll believe it was about fundamentals.

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