In 2016, we think IBM’s shares are due for a re-rating - investors will start to value IBM as an emerging software leader rather than a legacy hardware player. Like SAP and Oracle, many of IBM’s legacy businesses - especially Enterprise Resource Planning (ERP) systems - are struggling to adapt to a world moving rapidly to cloud-based services. The company is at the final stages of a difficult transition, but most of the bad news around this transition is now in the price of IBM’s shares.
In this report, we will look at the themes that will send IBM shares up in 2016 and its valuation and risk screen.
- This report is part of the ecosystem of thematic investment research reports, supported by the “thematic engine”.
- About the Thematic Research Ecosystem
- The author has developed a unique thematic methodology for valuing technology, media and telecom companies based on their relative strength in the big investment themes that are impacting their industry. Whilst most investment research is underpinned by backwards looking company valuation models, the author’s thematic methodology identifies which companies are best placed to succeed in a future filled with multiple disruptive threats. To do this, the author tracks the performance of the top 600 technology, media and telecom stocks against the 50 most important themes driving their earnings, generating 30,000 thematic scores. The algorithms in the author’s “thematic engine” help to clearly identify the winners and losers within the TMT sector. The 600 TMT stocks are categorised into 18 sectors. Each sector scorecard has a thematic screen, a risk screen and a valuation screen. The thematic research ecosystem has a three-tiered reporting structure: single theme, multi-theme and sector scorecard. This report is a Multi-Theme report, covering all stocks, all sectors and all themes, giving readers a strong sense of how everything fits together and how conflicting themes might interact with one another.
- The thematic investment research product, supported by the thematic engine, is aimed at senior (C-Suite) executives in the corporate world as well as institutional investors.
- Corporations: Helps CEOs in all industries understand the disruptive threats to their competitive landscape
- Investors: Helps fund managers focus their time on the most interesting investment opportunities in global TMT.
- The unique differentiator, compared to all rival thematic research houses, is that the thematic engine has a proven track record of predicting winners and losers.
Software defined networking
IBM ON OUR THEMATIC SCREEN
IBM ON OUR VALUATION SCREEN
IBM ON OUR RISK SCREEN
APPENDIX: “THEMATIC” RESEARCH METHODOLOGY