Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, March 20, 2009

Article Excerpt

INTERNATIONAL BUSINESS MACHINES CORP., $92.51, New York symbol IBM, is in talks to buy computer-hardware maker Sun Microsystems Inc. (Nasdaq symbol JAVA). The rumoured $6.5-billion price is roughly double Sun’s market cap before the news became public. This would be a big purchase for IBM, which earned $12.3 billion, or $8.93 a share, in 2008. Sun’s appeal justifies the high price, and it’s a good fit with IBM. Both IBM and Sun make computer servers for governments and big corporations, so IBM would cut its costs and increase its market share by purchasing Sun. (IBM has about 30% of the server market, and Sun would push this up to 40%.) The move would also help IBM compete with Cisco Systems Inc., which plans to enter the server business. In addition, Sun’s software expertise and its widely used Java programming language would enhance IBM’s web-based services. Regardless of the outcome, IBM is still a buy. ADOBE SYSTEMS INC., $20.46, Nasdaq symbol ADBE, gained over…