Today’s new Top Pick for 2014 is a giant in the computer industry that is currently trading at bargain levels.
International Business Machines (IBM)
from Heartland Advisers
Heartland Adviser’s top pick for 2014 is the well-known blue chip company International Business Machines (IBM).
Since IBM’s founding in 1910, it’s been at the forefront in the constantly changing area of high technology. Technology has changed drastically since 1910, and IBM has always risen to a challenge, which over the years has left many high tech companies in the dust.
I’ve been following IBM since the early 1980s, and it’s gone through periods when Wall Street analysts have been skeptical of IBM’s future. Today is one of those times, providing you with an excellent buying opportunity.
The skepticism comes from the supposed inability to react to such developments as the progression from typewriters to computers, and from mainframes to personal computers. After that, IBM got out of the personal computer business, which had become a commodity with low prices to a service company. It sold its computer manufacturing business to Lenovo.
Analysts are currently nervous because the last few quarter’s revenues have been declining, causing an irrational overreaction as the price went from a high of almost $216 to its current drop in price in $178 range.
IBM has a dividend of over 2%, which will give you a good income while you wait.
Russ Kaplan, Heartland Adviser, www.russkaplaninvestments.com, 402-614-1321, December 20, 2013