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Sergey Savastiouk's Avatar
published in Blogs
Jul 09, 2019

IBM (IBM, $140.43) closes its $34 billion acquisition of Red Hat (RHT, $187.70)

International Business Machines (IBM) completed its $34 billion acquisition of software firm Red Hat, as announced by the companies on Tuesday.

Initiated in October, the deal involves IBM  paying $190 per share in cash for Red Hat, a price representing a 63% premium over the stock's price before the merger was announced. This marks IBM’ s biggest deal ever.

Following the acquisition, Red Hat will be a part of IBM’s Hybrid Cloud division, according to the original announcement.

IBM had previously indicated that the merger would boost its cloud infrastructure.   

Related Ticker: IBM

IBM in +1.95% Uptrend, advancing for three consecutive days on December 06, 2024

Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where IBM advanced for three days, in of 345 cases, the price rose further within the following month. The odds of a continued upward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on November 18, 2024. You may want to consider a long position or call options on IBM as a result. In of 76 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for IBM just turned positive on November 20, 2024. Looking at past instances where IBM's MACD turned positive, the stock continued to rise in of 40 cases over the following month. The odds of a continued upward trend are .

IBM moved above its 50-day moving average on November 21, 2024 date and that indicates a change from a downward trend to an upward trend.

The 10-day moving average for IBM crossed bullishly above the 50-day moving average on November 29, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 16 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .

The Aroon Indicator entered an Uptrend today. In of 273 cases where IBM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Bearish Trend Analysis

The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 5 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 10 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where IBM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

IBM broke above its upper Bollinger Band on November 21, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. IBM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock better than average.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (8.881) is normal, around the industry mean (27.932). P/E Ratio (34.220) is within average values for comparable stocks, (49.560). IBM's Projected Growth (PEG Ratio) (7.774) is very high in comparison to the industry average of (1.851). Dividend Yield (0.028) settles around the average of (0.022) among similar stocks. P/S Ratio (3.501) is also within normal values, averaging (34.297).

Notable companies

The most notable companies in this group are Accenture PLC (NYSE:ACN), International Business Machines Corp (NYSE:IBM), Xerox Holdings Corp (NASDAQ:XRX), Unisys Corp (NYSE:UIS).

Industry description

The industry, whose total market cap runs into trillions, makes hardware/software that allows data to be stored, retrieved, transmitted, and manipulated on computers. With the ever-increasing relevance of data, the information technology (IT) industry has gained momentous growth over the years, and continues to thrive on innovation. Some of the behemoths in the industry are International Business Machines Corporation, Accenture, and VMware, Inc.

Market Cap

The average market capitalization across the Information Technology Services Industry is 10.29B. The market cap for tickers in the group ranges from 0 to 223.78B. ACN holds the highest valuation in this group at 223.78B. The lowest valued company is ARSC at 0.

High and low price notable news

The average weekly price growth across all stocks in the Information Technology Services Industry was 1%. For the same Industry, the average monthly price growth was 2%, and the average quarterly price growth was 31%. SEAV experienced the highest price growth at 183%, while UTRX experienced the biggest fall at -49%.

Volume

The average weekly volume growth across all stocks in the Information Technology Services Industry was 177%. For the same stocks of the Industry, the average monthly volume growth was -51% and the average quarterly volume growth was 117%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 40
P/E Growth Rating: 64
Price Growth Rating: 54
SMR Rating: 73
Profit Risk Rating: 80
Seasonality Score: 18 (-100 ... +100)
Related Portfolios: APPLICATION SOFTWARE
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General Information

a manufacturer of various computer products through the use of advanced information technology

Industry InformationTechnologyServices

Profile
Fundamentals
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Industry
Information Technology Services
Address
One New Orchard Road
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