In this week’s video blog post, I look at IBM’s business model, top 5 risk factors, and contingent liabilities outlined in the company’s annual report.
As value investors, it is important to review the company’s fundamentals before deciding to invest in any company. Hope you all find this 16 minute video blog interesting. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
IBM is divided into 5 business segments – Cloud & Cognitive Software, Global Business Services, Global Technology Services, Systems and Global Financing. IBM is trying to integrate Artificial Intelligence into its services, and the company’s goal is to help transform traditional businesses into cognitive enterprises.
The top 5 risk factors I discussed are:
- Downturn in Economic Environment and Client Spending Budgets Could Impact the Company’s Business
- Cybersecurity and Privacy Considerations Could Impact the Company’s Business
- Due to the Company’s Global Presence, Its Business and Operations Could Be Impacted by Local Legal, Economic, Political, Health and Other Conditions
- The Company’s Results of Operations and Financial Condition Could Be Negatively Impacted by Its U.S. and non-U.S. Pension Plans
- The Company’s Financial Performance Could Be Impacted by Changes in Market Liquidity Conditions and by Customer Credit Risk on Receivables
0:32 Business Overview
2:35 Business Segments
7:56 Top 5 Risk Factors
13:11 Contingent Liabilities – Court Cases
10K Annual Report: here
Morningstar Key Ratios Link: here.
Company overview: International Business Machines Corporation is an American multinational technology company headquartered in Armonk, New York. It was founded in 1911 in Endicott, New York as the Computing-Tabulating-Recording Company and was renamed “International Business Machines” in 1924.
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