IBM: Decisions, Decisions, Decisions

IBM stock chart

IBM (NYSE: IBM) hit $160 today, even surpassed it by a hair or two. And that was the median target price of 21 analysts who are currently covering the company. Of course, median price means that some of those analysts were forecasting higher targets, most notably one analyst who thinks $186 is a possibility.

If the pros can’t agree about this, how are individual investors supposed to make up their minds?

Well, one of the most basic factors is what type of investor you are. If you are looking for quick profits, IBM certainly hasn’t been a good fit for you over the last 12 months. However, if you are a buy and hold investor who happened to jump on IBM around February, then you are sitting mighty pretty.

The problem is, at this point, everyone who owns the stock or is thinking of buying it may have a decision to make.

Given IBM’s latest switch of focus to what it calls “strategic imperatives”, and how successful they have been, there probably isn’t much question that IBM’s general long term trajectory will be up. But the share price got down to around $120 earlier in the year, and it seems to have hit an important point today.

So, if you have the stock, do you cash out and wait for a dip to get back in?

Or, if you believe it is a good buy and hold investment, do you buy now or wait for another drop towards $120?

Don’t you hate those awkward spots?

The thing is, if you decide to wait for a bit of a drop, you still have to decide how low is low enough.

You might think that the same can be said of any stock – the biggest decisions are when to jump in and when to jump out. But some of the tech stocks are in a bit of a different position these days. Because analysts seem to be undervaluing the new directions they’re taking. And nowhere is that more true than with IBM.