Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, May 28, 2010

Article Excerpt

INTERNATIONAL BUSINESS MACHINES CORP., $125.26, New York symbol IBM, continues to expand its business-software operations. That’s because it earns higher profits from selling software and computer-management services than selling mainframe computers. This week, the company agreed to buy Sterling Commerce from AT&T (see below). Ohio-based Sterling makes software that helps automate and streamline transactions between businesses, such as buying raw materials and replenishing inventory. Sterling has over 18,000 clients. The sale will close later this year. IBM is paying $1.4 billion for Sterling. To put this figure in context, IBM earned $2.6 billion, or $1.97 a share, in the three months ended March 31, 2010. IBM, our Wall Street Stock Forecaster “Stock of the Year for 2010,” is a buy. AT&T INC., $24.30, New York symbol T, will earn a $750-million gain on the sale. It earned $3.5 billion, or $0.59 a share in the first quarter of 2010. The company will use the cash to expand and improve its wireless networks. AT&T is…