A word on IBM

There is really nothing to be said. It's business is kicking ass and taking names, but the street can obviously give a shit.

Basically here is the breakdown...

As a trader: IBM has traded with the trailing PE of around 12 for the last few quarters. Meaning buy the dips, and sell when the trailing PE entered the 13 area.

To me this trader thesis is bullshit, but a point of fact none-the-less.

The fundie story:

1. IBM continues to beat, and increase guidance.
2. From the 4rth quarter to the first quarter, IBM has now swallowed two better than expected quarters and the stock has not moved since announcing the numbers. (this is a severed case of consolidation)
3. If IBM maintains the current guidance of 'at least' 11.20, smack a 12 PE, the year end price will be 134. (this is an absolute conservative price)

What I know:

IBM has been guiding higher quarter after quarter, and the 2010 earnings will be higher than 11.20. (Something like 11.50) It typically trades with a trailing PE of mid 12 to low 13, which leads to a conservative price tag of 150 by the end of the year.

Oh, and lets not forget, during the second half of the year the street usually prices stocks on 2011 earnings.

So yes, I am a buyer as others are selling.