Schaeffer's Daily Contrarian: Is IBM a Big Blue 'Buy?'

This optimistic article observes that IBM (NYSE: IBM) "has been on a tear lately, up almost 41% since [the market's] March 9 lows." However, the author notes that Big Blue's bounce has been relatively small in comparison with the gains collected by the Nasdaq Composite (COMP) and the S&P 500 Index (SPX) during the same time frame. As a result, the stock "has some room to rise." In fact, Barclays Capital analyst Ben Reitzes recently boosted his price target on IBM to $140, surpassing the security's current all-time high of $138, which was tagged back in 1999.

As a caveat, the author notes that IBM is still struggling against weakness in its hardware business. Despite the apparent dominance of the company's software and services divisions, "all of IBM tends to do well when its hardware business is on a roll." If the firm's own forecast can be believed, this critical unit could be on the road to recovery -- CFO Mark Loughridge recently predicted that the hardware business would enjoy double-digit profitability growth in the fourth quarter.

To continue reading this article, click here: http://www.schaeffersresearch.com/commentary/content/is+ibm+a+big+blue+buy/dailycontrarian.aspx?single=true&newsid=96004#96004&source=businesswire