St. James Investment Company, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. In its fourth-quarter letter, the fund talked about the FAAMG stocks, the economic downturns and highlighted the market’s subsequent recovery, and included other significant events during the previous quarter. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
St. James Investment Company, in its Q4 2021 investor letter, mentioned International Business Machines Corporation (NYSE: IBM) and discussed its stance on the firm. International Business Machines Corporation is an Armonk, New York-based computer hardware company with a $121.0 billion market capitalization. IBM delivered a 1.02% return since the beginning of the year, while its 12-month returns are up by 9.41%. The stock closed at $135.03 per share on January 10, 2022.
Here is what St. James Investment Company has to say about International Business Machines Corporation in its Q4 2021 investor letter:
“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of
time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)
Based on our calculations, International Business Machines Corporation (NYSE: IBM) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. IBM was in 41 hedge fund portfolios at the end of the third quarter of 2021, compared to 41 funds in the previous quarter. International Business Machines Corporation (NYSE: IBM) delivered a 0.64% return in the past 3 months.
In December 2021, we published an article that includes IBM in the 10 High Dividend Stocks for 2022. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.