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JimVanMeerten (62.12)

Oracle makes money the old fashion way

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May 03, 2011 – Comments (0) | RELATED TICKERS: ORCL

When I look for investments in the tech sector my Barchart screener often turns up Oracle (ORCL).  Oracle seems to make money not by being an innovator but by implementing sound business practices and smart acquisitions that round out their offerings to customers.  Money the old fashion way, they earn it.  The stock's recent price momentum is what got my attention.

Oracle Corporation (ORCL) is one of the world's leading suppliers of software for information management. The company develops, manufactures, markets and distributes computer software that helps corporations manage and grow their businesses. The company's software products can be categorized intotwo broad areas: Systems software and Internet business applications software.

Technical Factors:

1 - 100% Barchart technical buy signals

2 - Trend Spotter buy signal

3 - 9 new highs and up 6.80% in the last month

4 - Relative Strength Index 74.37% and climbing

5 - Trades around 36.24 with a 50 day moving average of 33.08

Fundamental Factors:

1 - As I mentioned before they don't seem to dazzle us with innovation but Wall Street analysts like their numbers

2 - Brokerages have released 15 strong buy, 19 buy, 8 hold and only 1 negative recommendation to their clients

3 - Projections for an increase in sales of 32.20% this year and another 8.70% next year fuel their reports

4 - Earnings consensuses are terrific with an increase of 29.90% expected this year followed by another 10.10% next year.  They show confidence in management with a 5 year earnings growth projection of 15.18% annually

5 - BMO Capital initiated their coverage of this issue with an over perform recommendation on 3/11/2011

General Investor Sentiment:

1 - Widely followed on Motley Fool with over 4,173 readers giving an opinion

2 - CAPS members vote 3,143 to 200 that the stock will out perform the market

3 - The experienced All Stars agree with both the CAPS members and BMO with a vote of 804 to 26

If you need a tech stock that makes its numbers then Oracle should be on your watch lists.


Jim Van Meerten is an analyst for  Marketocracy Capital Management.  He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs on Barchart.com  in his daily blog -- Barchart Portfolio Blogs.

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