Why Stephanie Link Is A Buyer Of IBM
On CNBC's "Closing Bell," Stephanie Link said she's not worried about declining software revenue in IBM (NYSE:IBM) because she thinks a lot of bad news is already priced in. She says the company is very early in its transition from legacy business and toward faster-growing segments like cloud, AI, blockchain and data analytics.
The company has a new CEO, who is an expert in the faster-growing segments. In October, IBM announced a spin-off of the managed infrastructure services division. This will result in a much simpler and faster-growing company. Over time, Link expects IBM to become a higher-multiple stock.
Link believes investors have to give the management time. She was very encouraged by the gross margin expansion and $11 to $12 billion of free cash flow that management announced. Link thinks 11 times earnings with a 5.70% yield is very attractive.
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