International Business Machines

01/07/2014 8:00 am EST


Our top pick for 2014 was founded in 1910, and has been at the forefront of the constantly changing area of high technology ever since, says Russ Kaplan, editor of the Heartland Advisor.

Our pick is the well-known blue chip company International Business Machines (IBM). Technology has changed drastically since 1910, and IBM has always risen to a challenge, which, over the years, has left many high tech companies in the dust.

I've been following IBM since the early 1980s, and it's gone through periods when Wall Street analysts have been skeptical of its future. Today is one of those times, providing you with an excellent buying opportunity.

The skepticism comes from the supposed inability to react to such developments as the progression from typewriters to computers, and from mainframes to personal computers.

After that, IBM got out of the personal computer business, which had become a commodity with low prices, to a service company. It sold its computer manufacturing business to Lenovo (LNVGF).

Analysts are currently nervous because the last few quarters' revenues have been declining, causing an irrational overreaction, as the price went from a high of almost $216, to its current drop in price in the $178 range. IBM has a dividend of over 2%, which will give you a good income while you wait.

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