Today is Tuesday, January 25, 2022.
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IBM's Cloud Bet Massively Pays Off
Shares of IBM (NYSE: IBM) jumped 2.46% in after-hours trading on Monday after the tech company posted positive earnings thanks to growth in cloud software and consulting.
Financials: IBM posted earnings of $3.35 per share and revenue of $16.70 billion in the fourth quarter; both were slightly better than expected.
In the Cloud: Hybrid cloud revenue shot up 16% in the quarter, but the real winner was IBM’s consulting hybrid cloud segment, where revenue jumped 31%.
Background: This was the first earnings since IBM sold off its managed infrastructure services business.
Final Thoughts: IBM could still be a good value stock, but is that because the company is consistently strong or because it has low expectations? Given IBM’s past history, there could be better tech companies for investors to check out.
Notable Earnings Today: Microsoft (Nasdaq: MSFT), Johnson & Johnson (NYSE: JNJ), General Electric (NYSE: GE), Texas Instruments (Nasdaq: TXN), Logitech International (Nasdaq: LOGI), Verizon Communications (NYSE: VZ), Capital One Financial (NYSE: COF), American Express (NYSE: AXP), Lockheed Martin (NYSE: LMT), 3M (NYSE: MMM), F5, (Nasdaq: FFIV), Agilysys (Nasdaq: AGYS), Archer Daniels Midland (NYSE: ADM), Boston Properties (NYSE: BXP), Canadian National Railway (NYSE: CNI), Hawaiian Holdings (Nasdaq: HA), Invesco (Nasdaq: INVZ), Navient (Nasdaq: NAVI), NextEra Energy (NYSE: NEE), NextEra Energy Partners (NYSE: NEP), Paccar (Nasdaq: PCAR), Polaris (NYSE: PII), Raytheon Technologies (NYSE: RTX), Trustmark (Nasdaq: TRMK), United Microelectronics (NYSE: UMC), WesBanco (Nasdaq: WSBC), Xerox (Nasdaq: XRX), Marten (Nasdaq: MRTN), Stride (NYSE: LRN), ADM (NYSE: ADM), Brown & Brown (NYSE: BRO), Customers Bank (NYSE: CUBI).
Notable IPOs Today: American Rebel Holdings, Inc. Common Stock (Nasdaq: AREB), FGI Industries Ltd. Ordinary Shares (Nasdaq: FGI), Sonic Foundry, Inc. Common Stock (Nasdaq: SOFO), LatAmGrowth SPAC Unit (Nasdaq: LATGU), Keyarch Acquisition Corp (Nasdaq: KYCHU).
Notable Equity Crowdfunding Campaigns Ending Today: PhorMed (StartEngine), Palm Energy Systems (Wefunder), IX Water (StartEngine), GameIQ (StartEngine), Camp365 (StartEngine), Metaiye Knights (StartEngine), Saebo (StartEngine), Lonerider Spirits (Wefunder).
Notable Economic Events Today: S&P Case-Shiller national home price index (9:00 a.m. ET), Consumer confidence index (10:00 a.m. ET), API Weekly Crude Oil Stock (4:30 p.m. ET).
Change Healthcare Looks to Offload Assets
Change Healthcare (Nasdaq: CHNG) may want to sell some of its assets so that regulators can approve of its acquisition by UnitedHealth Group (NYSE: UNH), according to a Bloomberg report on Monday.
Details: The report indicates that Change Healthcare may want to sell ClaimsXten, its payment integrity business, which could be worth more than $1 billion.
Background: UnitedHealthcare Group originally wanted to close the acquisition a few weeks ago, but regulatory concerns pushed it to April.
Final Thoughts: Shares of UnitedHealth Group are up 32% in the past year. Change Healthcare is down nearly 17% during that time.
What Should Investors Do In This Market Correction?
With the January 2022 sell-off hurting big technology stocks, it might be wise for investors to consider other options for their portfolios.
Risk Reduction: Portfolio diversification through different asset classes is the best remedy for surviving a stock correction. In other words, instead of depending so much on growth tech stocks, look for value plays in other spaces.
Financial Side: With interest rates likely to increase in 2022, financial stocks are a good option. Bank stocks tend to perform well when interest rates go up.
Prices: There’s no denying the current state of inflation. Higher prices can be bad for tech stocks, but energy stocks and other commodities thrive during these environments.
Final Thoughts: Cryptocurrency is another option for portfolio diversification, but even cryptos have had a bad 2022 so far.
Trends to Watch
Opinion: Cryptocurrency Doesn’t Amount to Much (The Wall Street Journal)
Going All In: Lamborghini announces all future vehicles will have an electric motor (Electrek)
Dropping: Crypto Sell-Off Wipes $700B From Industry Market Cap So Far in 2022 (CoinDesk)
Offloading: Retail Traders Bailed on the Market Right Before Stocks Rebounded (Yahoo!)
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