Oracle Corp. (NYSE:ORCL)

CAPS Rating: 4 out of 5

The Company develops, manufactures, markets, distributes and services database, middleware and applications software that helps organizations manage and grow their businesses.


Player Avatar Gainster (42.39) Submitted: 7/13/2013 9:41:58 PM : Outperform Start Price: $31.23 ORCL Score: +3.11

Growth of cloud services / Internet use should affect this great database company positively. It also seems like the income has started to grow again as they had 26% profit growth in the last 12 months ending 31st May. The ROIC has been increasing steadily the last four years and is above 13% by now. In this perspective the stock is relatively cheap. Further the Price / Earnings and Price / Book is at the low end compared to the last 10 years.

At my workplace they tried to switch to MSSQL databases, but were forced to switch back for economical reasons. This is the same for many other companies and therefore they have a good hold of their market share, that includes the top 100 Fortune firms.

One thing I'm not so sure about, that's the Sun acquisition, which exposes them to the hardware server segment. On one side there might be some synergies in selling servers along databases and combining distribution networks. On the other side I think they lower their overall staying power by this acquisition, as Sun is in a more competitive situation. Also I don't know how successful Oracle will be in squeezing the open community that Sun promoted (like suing the Android platform for using the Dalvik machine and trying to squeeze a profit out of Open Office), it might backfire as it might create enemies amongst IT professionals. Then again Sun is just a minor part of Oracle and the pros might outweigh the cons.

Overall it seems like a very good and stable investment, with growth potential in the core business, a small dividend and a nice increasing ROIC since 2010.

Member Avatar Gainster (42.39) Submitted: 9/19/2013 11:13:55 AM
Recs: 0

I'm closing my position in Oracle today, as I want to free some money for other and better opportunities.

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