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Stock Spotlight 5/29/2024
Custom Instruction: Advanced Investor
About IBM Stock
International Business Machines Corporation (IBM) is a global leader in providing integrated solutions and services across various domains. The company operates through four primary segments: Software, Consulting, Infrastructure, and Financing. Headquartered in Armonk, New York, IBM has a long history dating back to its incorporation in 1911. The company has established strategic partnerships with major industry players such as Adobe, Amazon Web Services, Microsoft, Oracle, Salesforce, Samsung Electronics, and SAP.
IBM's Software segment offers hybrid cloud and AI platforms, enabling clients to achieve digital and AI transformations. The Consulting segment focuses on strategy, technology, and operations integration. The Infrastructure segment provides both on-premises and cloud-based server and storage solutions. Lastly, the Financing segment facilitates the acquisition of IBM's hardware, software, and services through client and commercial financing.
Here are some key metrics for IBM:
- Market Capitalization: $156.98 billion
- EBITDA: $14.38 billion
- P/E Ratio (TTM): 19.38
- PEG Ratio: 4.20
- Dividend Yield: 3.91%
- EPS (TTM): 8.82
- Revenue (TTM): $62.07 billion
- Gross Profit (TTM): $32.69 billion
- 52-Week High: $199.18
- 52-Week Low: $123.78
Risk
Investing in IBM comes with its own set of risks, as evidenced by several key risk metrics. Over the past year, IBM's stock has exhibited a medium risk level with an annualized standard deviation of 20.65%, which is significantly higher than the S&P 500 benchmark's 11.53%. This indicates that IBM's stock has been more volatile than the broader market.
The expected volatility for IBM stands at 21.23%, higher than the benchmark's 17.33%. This suggests that investors should be prepared for more pronounced price swings in IBM's stock. The maximum drawdown for IBM over the past year was -16.86%, compared to -10% for the S&P 500, highlighting the potential for substantial losses during downturns.
The Value at Risk (VaR) at a 99% confidence level for IBM is -3.58%, meaning that there is a 1% chance that the stock could lose more than this percentage in a single day based on historical data. This is slightly higher than the benchmark's VaR of -3.06%. On the upside, IBM has a potential gain of 3.24% in a single day with a 99% confidence level, compared to the benchmark's 2.61%.
