The Rising Influence of Rising Affluence

[DewDiligence]

IBM lays an egg, which almost never happens:

http://online.wsj.com/article/SB10001424127887324763404578431253490245598.html

Beware software companies that blame bad results on deals "slipping" to the next quarter. Similar to its database rival Oracle, International Business Machines said Thursday that its failure to close big software deals at the end of the first quarter was the culprit for missing Wall Street's revenue and earnings expectations.

…The overarching concern, considering that IBM's top line has stopped growing, is the company's ability to deliver on its promise of continued earnings-per-share growth of around 10% a year.

I’m willing to give IBM a pass this time because it has been such a reliable cash-generation machine. The company still expects to generate non-GAAP EPS of $16.70+ in 2013 and, more important, $20+ in 2015.

I think IBM can probably meet the 2015 goal; if they can, today’s share price in the low $190’s will likely turn out to be a bargain.