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IBM Outperforms Even Apple: Smarter Planet, Big Data and Cloud Power the Future

48 points by Sato 15y ago

tybris 15y ago
Funny that he's praising IBM for something as meaningless as a YTD stock price change, and then goes on to complain about Amazon and conveniently ignores that its stock price outperforms IBM at every level. http://www.wolframalpha.com/input/?i=ibm+vs+aapl+vs+amzn http://www.wolframalpha.com/input/?i=ibm+vs+aapl+vs+amzn
- sek 15y ago
  You can also clearly see that the numbers of Apple are better than IBM. Who cares about the stock price.
  - hollerith 15y ago
    Uh, because return on investment is the most important number of all? (Remember that the numbers in financial accounting were created for and have always been primarily for the benefit of investors.)
- bitdiddle 15y ago
  What's even more impressive is that IBM pays a dividend, which in volatile equity markets and low interest environments is a very good thing. Apple and Amazon do not.
  - notirk 15y ago
    And dividend payments are represented in the stock price graph as a reduction of the price (on the ex-dividend date), making the return to investors actually higher than what is shown in the graph.
    - onemoreact 15y ago
      Any graph that ignores dividends is useless for comparing companies over time. Unfortuantatly, you normaly pay taxes on dividends so there is no simple way to add them back into the stock price. Which, IMO is why it's best to compare earnings not stock price.
      - meric 15y ago
        US should implement dividend imputation. With it, dividends are no longer taxed at both the company level and the share holder level - they are taxed only in the latter. How it works is when a company pays a dividend, it is counted as taxable income as normal; then, the shareholder will be able to claim back the part of the dividend the company has already paid tax on. When a share market lacks dividend imputation, few companies pay a dividend, and rather resort to "share buy backs". Shareholders then are encouraged to aim for profit from capital gains (share price rising), rather than passive investment (collecting dividends). Implementing dividend imputation will neutralize this effect. See http://en.wikipedia.org/wiki/Dividend_imputation http://en.wikipedia.org/wiki/Dividend_imputation laws
        bitdiddle 15y ago
        Interesting, I need to read up on this. I would have thought compensation plans are what drive share buyback programs rather than the tax handling of dividends. Thanks!
        meric 15y ago
        >> compensation plans are what drive share buyback programs Sometimes, but without dividend imputation you really can't tell, both shareholders & employees who are affected by these compensation plans based on stock price, are incentivised to pay out profits via share buybacks as opposed to dividends. In Australia, where there is dividend imputation, you still sometimes see companies do share buy backs, (that could be driven by compensation), but mostly you see many large established companies paying out 50% or more of their profits as dividends. Here is a very large (in Australian terms) company that pay out around $1.3 of dividend a year and whose price is $13.90. http://au.finance.yahoo.com/q?s=qbe.ax&ql=1 http://au.finance.yahoo.com/q?s=qbe.ax&ql=1 (I'm not advocating anyone to buy it. It is an insurance company very exposed to the US economy & also recent natural disasters. )
nl 15y ago
IBM is a great company and all, but the idea that IT services will outperform all other IT related sectors is interesting.. Services are - by their nature - always related to head count. In the old days - 10 years ago - Microsoft dominated financially because they could resell shink-wrapped software better than anyone else. Customising software can be lucratitive, but it is difficult to make it as profitable as reselling copies of the same bits over and over again. Indeed - one could argue that Apple has simply out-Microsofted Microsoft now. They resell the same software and hardware and make almost MS-like profit margins (even taking the higher material costs of hardware ino account)
- mattmanser 15y ago
  Customising software can be lucratitive, but it is difficult to make it as profitable as reselling copies of the same bits over and over again. The amounts these companies charge is obscene, plenty of companies spend several orders of magnitude more money on customisation and consultancy than they do on generic software licences and hardware. And then you get the nice juicy recurring support contract on top of that too. Also Apple sells hardware, which is not the same bits over and over again.
alperakgun 15y ago
I will be surprised if IBM soon becomes the most valuable company, a very small probability for example...if iphone-n turns out to be a flop microsoft struggles in post of era.
tom_b 15y ago
IBM is very good at acquiring companies, rebranding acquired products as Big Blue offerings, and then pumping these down the established sales pipe to their enterprise customers. Notice that global services is the majority of their revenues - 57% - (http://www.wikinvest.com/stock/International_Business_Machines_%28IBM%29 http://www.wikinvest.com/stock/International_Business_Machin...) Oh, if only I could hack into that beautiful stream of out-sourced services money . . . (hint, hint)

48 points by Sato 15y ago

Funny that he's praising IBM for something as meaningless as a YTD stock price change, and then goes on to complain about Amazon and conveniently ignores that its stock price outperforms IBM at every level. http://www.wolframalpha.com/input/?i=ibm+vs+aapl+vs+amzn http://www.wolframalpha.com/input/?i=ibm+vs+aapl+vs+amzn

sek 15y ago
You can also clearly see that the numbers of Apple are better than IBM. Who cares about the stock price.
- hollerith 15y ago
  Uh, because return on investment is the most important number of all? (Remember that the numbers in financial accounting were created for and have always been primarily for the benefit of investors.)
bitdiddle 15y ago
What's even more impressive is that IBM pays a dividend, which in volatile equity markets and low interest environments is a very good thing. Apple and Amazon do not.
- notirk 15y ago
  And dividend payments are represented in the stock price graph as a reduction of the price (on the ex-dividend date), making the return to investors actually higher than what is shown in the graph.
  - onemoreact 15y ago
    Any graph that ignores dividends is useless for comparing companies over time. Unfortuantatly, you normaly pay taxes on dividends so there is no simple way to add them back into the stock price. Which, IMO is why it's best to compare earnings not stock price.
    - meric 15y ago
      US should implement dividend imputation. With it, dividends are no longer taxed at both the company level and the share holder level - they are taxed only in the latter. How it works is when a company pays a dividend, it is counted as taxable income as normal; then, the shareholder will be able to claim back the part of the dividend the company has already paid tax on. When a share market lacks dividend imputation, few companies pay a dividend, and rather resort to "share buy backs". Shareholders then are encouraged to aim for profit from capital gains (share price rising), rather than passive investment (collecting dividends). Implementing dividend imputation will neutralize this effect. See http://en.wikipedia.org/wiki/Dividend_imputation http://en.wikipedia.org/wiki/Dividend_imputation laws
      - bitdiddle 15y ago
        Interesting, I need to read up on this. I would have thought compensation plans are what drive share buyback programs rather than the tax handling of dividends. Thanks!
        meric 15y ago
        >> compensation plans are what drive share buyback programs Sometimes, but without dividend imputation you really can't tell, both shareholders & employees who are affected by these compensation plans based on stock price, are incentivised to pay out profits via share buybacks as opposed to dividends. In Australia, where there is dividend imputation, you still sometimes see companies do share buy backs, (that could be driven by compensation), but mostly you see many large established companies paying out 50% or more of their profits as dividends. Here is a very large (in Australian terms) company that pay out around $1.3 of dividend a year and whose price is $13.90. http://au.finance.yahoo.com/q?s=qbe.ax&ql=1 http://au.finance.yahoo.com/q?s=qbe.ax&ql=1 (I'm not advocating anyone to buy it. It is an insurance company very exposed to the US economy & also recent natural disasters. )

nl 15y ago

IBM is a great company and all, but the idea that IT services will outperform all other IT related sectors is interesting.. Services are - by their nature - always related to head count. In the old days - 10 years ago - Microsoft dominated financially because they could resell shink-wrapped software better than anyone else. Customising software can be lucratitive, but it is difficult to make it as profitable as reselling copies of the same bits over and over again. Indeed - one could argue that Apple has simply out-Microsofted Microsoft now. They resell the same software and hardware and make almost MS-like profit margins (even taking the higher material costs of hardware ino account)

mattmanser 15y ago
Customising software can be lucratitive, but it is difficult to make it as profitable as reselling copies of the same bits over and over again. The amounts these companies charge is obscene, plenty of companies spend several orders of magnitude more money on customisation and consultancy than they do on generic software licences and hardware. And then you get the nice juicy recurring support contract on top of that too. Also Apple sells hardware, which is not the same bits over and over again.

alperakgun 15y ago

I will be surprised if IBM soon becomes the most valuable company, a very small probability for example...if iphone-n turns out to be a flop microsoft struggles in post of era.

tom_b 15y ago

IBM is very good at acquiring companies, rebranding acquired products as Big Blue offerings, and then pumping these down the established sales pipe to their enterprise customers. Notice that global services is the majority of their revenues - 57% - (http://www.wikinvest.com/stock/International_Business_Machines_%28IBM%29 http://www.wikinvest.com/stock/International_Business_Machin...) Oh, if only I could hack into that beautiful stream of out-sourced services money . . . (hint, hint)