I generally post portfolio updates within 24-hours of the transaction. Time got away from me the past two weeks. I’ve had to take two unplanned business trips which have put me behind on everything, including this post. On February 11th, I placed a buy order for 16 shares of International Business Machines, (NYSE: IBM). This latest addition cost me $118.62 per share, totaling $1,898.06. My new International Business Machines share total is 41 shares at a per share cost basis of $131.71. This price is still a bit high for me. I’d like to get my cost basis below $120. In a perfect world, there will be a few more International Business Machine price dips over the next few months. My end game is to own more than 100 shares, so I can sell covered calls. If the price doesn’t drop, I can carry this out by buying 60 more shares and selling calls. For now, I’ll wait and see if the price dips enough to buy more shares. This latest IBM Stock purchase increases my annual dividend $83 dollars.
Why I Bought More International Business Machines
This new International Business Machines stock purchase is the second one I’ve made in the past three months. I bought 25 shares in November 2015. At the time I wrote a detailed article explaining my rational for the purchase. At the time International Business Machines stock was priced at $140.62. My opinion of the company hasn’t changed, so I’ll spare you all the long post this time. If you want to learn more about my decision to by IBM stock, please read my original IBM stock buy post.
One thing that has changed since my last IBM buy is a new acquisition. International Business Machines announced the acquisition of Truven Health Analytics for $2.6 billion. Truven is a healthcare data and analytics company that services the government, health plans and hospitals. Their data is used to identify cost savings and improve patient outcomes.
The Truven purchase is on par with IBM’s cloud computing and analytics services growth plan. The hope behind buying Truven is that its data can be plugged into Watson to help health plans save money and hospitals offer better care. Including the Truven acquisition, IBM’s Watson Health unit will have spent $4 billion on mergers and acquisitions since its launch less than a year ago.
What do you think of International Business Machines? Do you think IBM’s pivot into cloud computing and emphasis on Watson and healthcare is a wise move? Do you think International Business Machines can turn revenue losses around or is this stock a falling knife?