IBM's Sudden Bounce A Big Boon For Warren Buffett

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IBM – After seeing his investment in IBM turn sour for a while, IBM’s earnings-fueled spike this week has rewarded Buffett handsomely.

International Business Machines Corp. (NYSE:IBM) was in a major rut this year, but this week’s recent earnings-related bounce has greatly benefitted the world’s most famous investor.

CNBC has more details on just how much Buffett’s company has profited from the stock’s move:

IBM shares surged 8.9 percent Wednesday after the company reported better-than-expected third-quarter earnings the previous evening.

The Oracle of Omaha’s Berkshire Hathaway owns 54.1 million shares of IBM as of June quarter-end, according to FactSet. With Wednesday’s more than 14 point rally in the shares, Buffett’s company is up approximately $775 million on its position, assuming it hasn’t sold shares since then.

Ironically, Buffett himself admitted recently that his IBM investment was a mistake. “I was wrong … IBM is a big strong company, but they’ve got big strong competitors too,” He told CNBC. “I don’t value IBM the same way that I did six years ago when I started buying … I’ve revalued it somewhat downward.”

Due to the stock’s underperformance this year, Berkshire has been reducing its stake in IBM as of late. SEC filings show the company sold 10.5 million shares back in the second quarter of this year.

International Business Machines Corp. shares rose $0.39 (+0.24%) in premarket trading Friday. Year-to-date, IBM has declined -0.30%, versus a 16.06% rise in the benchmark S&P 500 index during the same period.

IBM currently has a POWR Rating of D (Sell), and is ranked #19 of 28 stocks in the Technology – Hardware category.

IBM at a Glance

IBM Current POWR Rating™
Overall POWR Rating™
IBM Current Price $119.90 0.69%
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IBM Price Reaction

The day of this event (Oct. 20, 2017)
IBM Closing Price$153.52 0.73%
IBM Volume8,306,931
89.15% from avg
Leading up to this event
IBM 1-mo return10.30%
After this event
IBM 1-day return0.85%
IBM 3-day return4.82%
IBM 5-day return4.70%

IBM Price Chart

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