International Business Machines Corp. (IBM): The Writing Is on the Cloud, my Dear Watson

Investors

IBM is a large scale first mover of the cognitive computing revolution and is trading cheaply on a P/E ratio basis to its peers.  Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.B) has invested $10.7 billion in IBM back in 2011 purchasing 64 million shares, and has added another 2.6 million since, for a total of 66.6 million shares worth over $13 billion today.  Not only does Buffet own more shares than he did in 2011, since IBM has repurchased nearly 100 million shares, Buffett’s ownership stake has gone from 5.2% at the beginning of 2011 to 5.9% at the end of 2012.

The Foolish Bottom Line

Given the trajectory of IBM in the Big Data movement and its financial discipline in repurchasing shares, it’s not hard to see why CFO Mark Loughridge set a target to double IBM’s earnings per share in 5 years. IBM has a stated mission of becoming “the worlds most essential company,” and they plan on digging their moat with Big Data.

The article The Writing Is on the Cloud, my Dear Watson originally appeared on Fool.com and is written by Wes Patoka.

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