Category: Stock Market

IBM Posts Good Q2 Earnings

The technology giant, IBM, has just posted its second quarter earnings and they’re better than expected. According to TheStreet.com, while the analysts expected $2.89 a share, the actual earnings were $2.95.

Although the revenue has fallen 3% from a year ago to $20.24 billion, it’s better than $20.04 billion the analysts expected. However, the concerns remain as now IBM has had 17 consecutive quarters of declining revenues.

Deutsche Bank has raised its price target from $135 to $145 per share, and maintained a “hold” rating. The stock currently trades at around $160 per share, so the target isn’t upbeat at all.

“On the surface, results appear to be improving, but digging deeper, we continue to see areas of concern,” claimed bank’s analyst.

On the other hand, when it comes to a rating by TheStreet.com, it is a “buy” with a score of “B-.” The strengths seen in IBM include good cash flows, better profit margins, and good returns on equity.

When it comes to strategy, Martin Schroeter, IBM’s CFO, stated that his company is well on the way to execute its strategic imperatives plan. In the past, IBM was able to adopt to a changing industry by focusing less on hardware and more on consulting and infrastructure services.

Currently, IBM employs nearly 380,000 people and has a market cap of $150 billion, placing it among the biggest companies in the world. Known as the Big Blue, IBM has been among the leaders in the high-tech industry for decades.

Most Millennials Don’t Invest in the Stock Market

Young people are staying away from the stock market. In a report by TheStreet.com, one-third of Millennials own stocks. When it comes to the previous generations, Generation X and Baby Boomers, a half of them owns stocks, either directly or in the form of investment funds such as mutual funds and ETFs.

More than half of Millennials state lack of money as the reason for not investing. A quarter says they lack understanding about the financial markets. When it comes to specific age groups, ages 18 to 25 invest even less than 25 to 35 age group.

When it comes to retirement investing, the longer the time horizon, the more time there is to accumulate wealth. By not investing early, these individuals will likely miss on compounding of their money over several decades.

The statistics also show that college educated Millennials are more likely to invest in stocks. Over 60% of college graduates have their money in markets, according to Bankrate.

Even though young people invest less, they are more bullish than older investors. A financial services company, Securian, states that over 70% of Millennial investors expect a bull market in the near term, while only half of the Baby Boomers do.

Another distinguishing feature is that the younger generation tends to invest more in Exchange-traded Funds (ETFs) than older individuals. ETFs seek to mimic a variety of indices and asset classes, while charging less in fees than mutual funds.