Traders Purchase Large Volume of Call Options on International Business Machines (NYSE:IBM)

Key Points

• IBM saw unusually heavy call-option buying on Thursday, with 63,624 calls purchased, about 46% above its typical volume. That suggests traders were positioning for more upside in the stock.
• The stock jumped sharply to $242.16 on elevated trading volume, while IBM also recently beat quarterly earnings expectations and posted 9.5% revenue growth year over year.
• IBM raised its quarterly dividend to $1.69 per share, or $6.76 annualized, for a 2.8% yield. The article also highlights positive catalysts around quantum-computing funding announcements and analyst ratings that remain generally constructive.

International Business Machines Corporation (NYSE:IBM - Get Free Report) was the recipient of unusually large options trading on Thursday. Stock investors purchased 63,624 call options on the stock. This is an increase of approximately 46% compared to the typical volume of 43,616 call options.

International Business Machines Stock Performance

Shares of IBM traded up $17.16 on Thursday, reaching $242.16. The company's stock had a trading volume of 8,684,621 shares, compared to its average volume of 5,978,263. The company has a debt-to-equity ratio of 1.75, a current ratio of 0.80 and a quick ratio of 0.76. The stock has a market capitalization of $227.61 billion, a P/E ratio of 21.41, a PEG ratio of 2.30 and a beta of 0.58. The stock's 50 day simple moving average is $238.52 and its two-hundred day simple moving average is $272.95. International Business Machines has a 12-month low of $212.34 and a 12-month high of $324.90.

International Business Machines (NYSE:IBM - Get Free Report) last posted its quarterly earnings data on Wednesday, April 22nd. The technology company reported $1.91 EPS for the quarter, topping the consensus estimate of $1.81 by $0.10. International Business Machines had a return on equity of 37.23% and a net margin of 15.61%.The firm had revenue of $15.92 billion for the quarter, compared to the consensus estimate of $15.60 billion. During the same quarter last year, the company earned $1.60 earnings per share. The business's revenue for the quarter was up 9.5% compared to the same quarter last year. Research analysts forecast that International Business Machines will post 12.4 earnings per share for the current fiscal year.

International Business Machines Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Wednesday, June 10th. Stockholders of record on Friday, May 8th will be issued a $1.69 dividend. This represents a $6.76 annualized dividend and a dividend yield of 2.8%. This is a positive change from International Business Machines's previous quarterly dividend of $1.68. The ex-dividend date of this dividend is Friday, May 8th. International Business Machines's payout ratio is presently 59.77%.

More International Business Machines News

Here are the key news stories impacting International Business Machines this week:

• Positive Sentiment: IBM and the Commerce Department announced plans for America’s first purpose-built quantum foundry, backed by a proposed $1 billion CHIPS award, which could strengthen IBM’s quantum leadership and future revenue opportunities. IBM and U.S. Department of Commerce Announce America's First Purpose-Built Quantum Foundry, Supported by Proposed $1 Billion CHIPS Award
• Positive Sentiment: Reports that the Trump administration will allocate about $2 billion to quantum computing firms, including IBM, have lifted the stock on expectations of direct funding support and possible equity-backed government involvement. IBM and Quantum Stocks Jump on Trump Administration Funding Pact. What We Know.
• Neutral Sentiment: IBM’s recent AI-security and Project Glasswing announcements may help the company’s longer-term enterprise story, but they appear secondary today to the quantum funding headlines. IBM Brings Its Most Advanced AI-Powered Security Portfolio to Clients, and is Strengthened by Ongoing Project Glasswing Work

Wall Street Analyst Weigh In

A number of equities research analysts recently commented on IBM shares. HSBC upgraded shares of International Business Machines from a "reduce" rating to a "hold" rating and upped their price target for the company from $218.00 to $231.00 in a report on Tuesday, April 28th. Wedbush restated an "outperform" rating and issued a $320.00 price objective on shares of International Business Machines in a research report on Wednesday, May 6th. Morgan Stanley increased their target price on shares of International Business Machines from $215.00 to $225.00 and gave the stock an "equal weight" rating in a report on Thursday, April 23rd. Stifel Nicolaus reduced their price target on International Business Machines from $340.00 to $290.00 and set a "buy" rating on the stock in a report on Wednesday, April 8th. Finally, Jefferies Financial Group lowered their price target on International Business Machines from $370.00 to $320.00 and set a "buy" rating for the company in a research report on Monday, April 20th. One research analyst has rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and seven have given a Hold rating to the company. Based on data from MarketBeat.com, International Business Machines presently has an average rating of "Moderate Buy" and an average price target of $294.41.

Insider Activity at International Business Machines

In other news, Director Michael Miebach bought 434 shares of the business's stock in a transaction on Wednesday, February 25th. The stock was acquired at an average price of $233.33 per share, with a total value of $101,265.22. Following the completion of the purchase, the director directly owned 434 shares in the company, valued at $101,265.22. This represents a ∞ increase in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. Company insiders own 0.27% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of the company. CVA Family Office LLC grew its holdings in International Business Machines by 1.4% during the 4th quarter. CVA Family Office LLC now owns 2,389 shares of the technology company's stock valued at $708,000 after purchasing an additional 33 shares during the last quarter. Foster Group Inc. boosted its position in shares of International Business Machines by 1.3% during the fourth quarter. Foster Group Inc. now owns 2,507 shares of the technology company's stock valued at $742,000 after buying an additional 33 shares during the period. New Covenant Trust Company N.A. boosted its position in shares of International Business Machines by 3.8% during the fourth quarter. New Covenant Trust Company N.A. now owns 905 shares of the technology company's stock valued at $264,000 after buying an additional 33 shares during the period. McGowan Group Asset Management Inc. grew its stake in shares of International Business Machines by 1.2% during the fourth quarter. McGowan Group Asset Management Inc. now owns 2,693 shares of the technology company's stock valued at $798,000 after buying an additional 33 shares during the last quarter. Finally, CFS Investment Advisory Services LLC raised its holdings in shares of International Business Machines by 0.4% in the third quarter. CFS Investment Advisory Services LLC now owns 9,359 shares of the technology company's stock worth $2,878,000 after buying an additional 34 shares during the period. 58.96% of the stock is currently owned by institutional investors.

International Business Machines Company Profile

International Business Machines Corporation (IBM) is a global technology and consulting company headquartered in Armonk, New York. Founded in 1911 as the Computing-Tabulating-Recording Company (CTR) and renamed IBM in 1924, the company has evolved from early electromechanical machines to a diversified technology provider serving enterprises and governments worldwide. IBM is publicly traded on the New York Stock Exchange under the ticker symbol IBM.

IBM's principal businesses encompass cloud computing and software, infrastructure and systems, consulting and technology services, and research and development.

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