IBM (IBM) Investors Hope for Smart Acquisition as Revenue Growth Remains Elusive
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Overall Analyst Rating:
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Dividend Yield: 3.6%
Revenue Growth %: +1.7%
Overall Analyst Rating:
NEUTRAL (
Up)Dividend Yield: 3.6%
Revenue Growth %: +1.7%
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International Business Machines (NYSE: IBM) is in need of some serious revenue growth. And that might give a boost to tech names like Splunk (Nasdaq: SPLK) and NetApp (Nasdaq: NTAP).
Bloomberg notes that IBM's sales have been relatively stagnant over the last four years, rising just 0.8 percent over the time frame. That is the worst four-year streak since the four-years ending in 2002.
NetApp could bolster IBM's cloud storage offerings while Splunk would enhance the company's data analytics business.
Last May, IBM said it was looking to make an acquisition between $200 million and $1.5 billion. The company's CFO, Mark Loughridge, emphasized that it wasn't looking to make big acquisitions. The company has also stated its intent to do about $20 billion in deals from 2011 to the end of 2015 and has about $14.5 billion left in the war chest. It completed 11 acquisitions in 2012, which includes five in data storage.
One analyst from Sterne Agee says IBM might need to pay a 30 percent to 100 percent premium for NetApp. The analyst notes that IBM's storage segment is still a weak area for the firm.
Other potential targets might include Juniper Networks (NYSE: JNPR) in hardware and Akamai Technologies (Nasdaq: AKAM) for additional cloud presence.
Investors are hoping for a smart purchase; while peers Oracle (Nasdaq: ORCL) and SAP AG (NYSE: SAP) gained 30 percent and 49 percent in 2012, IBM rose just 4.2 percent. Ahead of the bell, IBM is up 0.2 percent.
Bloomberg notes that IBM's sales have been relatively stagnant over the last four years, rising just 0.8 percent over the time frame. That is the worst four-year streak since the four-years ending in 2002.
NetApp could bolster IBM's cloud storage offerings while Splunk would enhance the company's data analytics business.
Last May, IBM said it was looking to make an acquisition between $200 million and $1.5 billion. The company's CFO, Mark Loughridge, emphasized that it wasn't looking to make big acquisitions. The company has also stated its intent to do about $20 billion in deals from 2011 to the end of 2015 and has about $14.5 billion left in the war chest. It completed 11 acquisitions in 2012, which includes five in data storage.
One analyst from Sterne Agee says IBM might need to pay a 30 percent to 100 percent premium for NetApp. The analyst notes that IBM's storage segment is still a weak area for the firm.
Other potential targets might include Juniper Networks (NYSE: JNPR) in hardware and Akamai Technologies (Nasdaq: AKAM) for additional cloud presence.
Investors are hoping for a smart purchase; while peers Oracle (Nasdaq: ORCL) and SAP AG (NYSE: SAP) gained 30 percent and 49 percent in 2012, IBM rose just 4.2 percent. Ahead of the bell, IBM is up 0.2 percent.
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