Oracle (ORCL)
James | Apr 02, 2009 | Comments 0
ORCL Oracle (USA)
Oracle is a leading supplier of enterprise database management systems and business applications.
What I Like
With ORCL share price currently at $18.82 it shows the company is on an uptrend when valued against the 50-Day Moving Average, which is $16.49. With a 52-Week High of $23.62 (Aug 08) and a 52-Week Low $13.80 (March 09) it has seen its share of volatility. I think Oracle will continue to strengthen its market position and generate cash. Even though no company is immune to a global economic slowdown, Oracle’s large product portfolio and large revenue streams will allow it to continue to grow and be successful. Oracle is 60.2% institutionally held which is solid as you generally loom for a company to be between 30-70% institutionally held. Another solid number is the fact that the company is 22.83% held by Insiders. This shows faith within the company for success as they initiated many stock buy-backs in the past year. Oracle has shown steady revenue numbers returning 13.18% on assets and 26.15% on Equity. Daily Volume is above 100,000, which is the threshold in which I set. 19 analysts cover it currently which helps stimulate market interest. Even though it is a well-known company it still has room for growth, which is why I like it so much.
What I Don’t Like
Oracle the best of breed company for Systems Software however I foresee this industry weakening in the next several quarters. Companies might delay purchasing new software during these challenging times, which could hurt earnings. I still remain optimistic for sub-industries such as security and server virtualization software.
Overview
Overall Oracle is a very solid investment in current times. Yes there are concerns of a slowdown among the Systems Software industry though I think Oracle being the dominant company it is will be able to scrap through tough times and continue to put up solid earnings. Its current Fair Value Calculation is $25.70, which makes it undervalued by $6.88. I see the stock rising to levels of $24-$26 by years end. As a result I give ORCL the BUY rating for the upcoming year.
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Filed Under: Featured • Technology | Retail
