Our worst performer was International Business Machines (NYSE:IBM), one of the world’s largest providers of information-technology solutions and services. The stock fell 11.7% from $174.14 to $153.83, reducing the Fund’s return by 49 basis points. Investors were disappointed by IBM’s weak quarterly operating margins, and questioned whether the company will be able to meet its annual earnings guidance. The stock fell again when famed investor Warren Buffett (Trades, Portfolio) sold a third of his shares. While we recognize the near-term challenges, we believe IBM’s transition to a software-and analytics-oriented business will create a lot of value, so we’re holding onto our position.
From Jerome Dodson (Trades, Portfolio)'s second quarter 2017 Parnassus Fund commentary.
