Bridgewater's new position in IBM isn't a huge one, at around $17 million at the time it was picked up in the third quarter of 2016, but it's meaningful because it marks a vote of confidence in management's ongoing transformation of Big Blue.
The key to the transformation is the development of sales in its key growth initiatives.Together, IBM calls theseareas-- big data, analytics, cloud services, and mobile and IT security -- its strategic imperatives.
Indeed, the European exposure is likely to hold the company in good stead because another of its customers, Meritor, is forecasting European heavy- and medium-duty truck production to be flat, compared with a decline for North America in its fiscal year to September.
In the long term, WABCO is hoping that regulatory and environmental issues will spur future sales of its efficiency, safety, and emission-reduction solutions -- management claims "a truck equipped with all of WABCO's green technologies can improve fuel efficiency by more than 15%." On a forward P/E of more than 17 times earnings, it's not an obviously cheap stock, but long-term prospects look positive.
Moreover, cybersecurity stocks tend to generate a lot of cash, and on a price-to-free cash flow basis, the stock isn't expensive.