Finance essay on IBM

IBM is a renowned and stable company, which operates in the market internationally and has reached tremendous success in its business development. In this regard, investments in IBM have good prospects because risks of losing investments are low, whereas the return on investments is almost certain, although the return on investments is not high. At the same time, the purchase of 100 shares at the price $146.52 as it is now is reasonable and worth consideration because such investments can be profitable and bring profits to investors. On the other hand, it is important to remember that the current situation in the market is unstable and the economic recession can still have a negative impact on the development of IBM within the next year. Nevertheless, the purchase of 100 shares of IBM is a reasonable investment because the company keeps growing and still has a considerable potential for its steady growth.

In order to make a reasonable and correct decision, it is necessary to dwell upon the financial performance of IBM within the last five years. In this respect, it is important to place emphasis on the fact that the company grew steadily within the last five years and there were only two considerable drops in the financial performance of the company, namely in July 2006, when the price of IBM’s shares fell below $80 and in the late 2008, when the price of IBM shares hardly exceeded $80. The decline in 2006 was mild and did not affect shareholders considerably because the company has recovered fast and carried on growing. As for the considerable and the most significant drop in the financial performance within the last five years, in the late 2008, it is worth mentioning the fact that the company still has managed to recover fast and within a year the company’s share price has reached the level of the mid-2008, when they were at the highest point.

Moreover, today, the price of IBM’s shares has already exceeded $140 and, what is even more important, it grew steadily since the late 2008 after the end of the fall of IBM’s share price. In such a way, the company has proved to be able to recover fast. The current growth of IBM indicates to the potential growth in the next year. Therefore, the purchase of 100 shares of IBM is reasonable because it can bring profits to investors, although the profit will not be high because the growth will be steady and less significant compared to 2009. In fact, taking into consideration the growth of IBM’s share price within the last half of a year, it is possible to presuppose that the share price will increase $10 or $15 at the most. In addition, it is worth taking into consideration the risk of possible falls in the price of IBM’s shares in the course of the year but overall result will be positive and the price of shares will increase.

Thus, it proves beyond a doubt that IBM is a reliable company and purchase of 100 shares of this company is a reasonable investment. This investment can bring profits to investors, although profits will not be exorbitant.

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