IBM $152.51

IBM $152.51 (New York symbol IBM; Shares outstanding: 960.9 million; Market cap: $147.6 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.ibm.com) continues to shift away from mainframes and computer consulting services to faster-growing areas like cloud computing and analytics software.

As part of that change, IBM is developing software to analyze data from the IoT—Internet of Things.

By 2020, the IoT could connect over 30 billion devices to the Internet—from automobiles to home thermostats and appliances.

Meantime, in the three months ended March 31, 2016, revenue from IBM’s cloud, IoT software and other new businesses was $7.0 billion. It rose 17% from $6.0 billion a year earlier. These operations now contribute 37% of total revenue. That’s up from 31%.

However, weaker demand for IBM’s traditional products caused the company’s overall revenue to fall 4.6% in the quarter, to $18.7 billion from $19.6 billion a year earlier.

The high U.S. dollar also hurt the contribution of its overseas operations. IBM gets 60% of its sales from outside of the U.S.

Per-share earnings for the quarter fell 19.2%, to $2.35 from $2.91. That beat the consensus of $2.09.

IBM will probably earn $13.50 a share in 2016, and the stock trades at just 11.3 times that forecast.

IBM is a buy.

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Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

ETFs

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Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

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AI Investing

Artificial intelligence (AI) is essentially the merging of today’s big computing with big data. This has resulted in breakthroughs in everything from creating machines to recognize faces with more accuracy than a human, to the development of chatbots able to collect, organize and simplify all the Internet has to say on any topic.

Spinoffs

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Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Mining Stocks

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Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.