In the following video, Foolish tech/telecom analyst Andrew Tonner tells us about the one tech company Warren Buffett loves. Buffett has long shied away from tech stocks, even during the periods when the Nasdaq has done well, but he's finally made his first foray into technology: a $15 billion position in IBM.
Andrew points out that the company has built itself into an enterprise player with a deep moat, making it a classic Buffett pick. It's also a leader in returning capital to its shareholders, with its yield having increased by an average of 17% each year for the past five years. IBM has spent $100 billion in dividends and share buybacks over the past decade. It's a cheap stock too, trading at a P/E of 14.
Stable and shareholder-friendly, IBM is widely covered on the Street, and it tends to trade at a fair price. And as Andrew says, it's the type of company that has made Buffett a billionaire.
For other tech giants such as Microsoft, however, it's a different story. It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.
Copyright © 2009 The Motley Fool, LLC. All rights reserved.