Oracle Corp.

Description - Oracle Corporation, an enterprise software company, engages in the development, manufacture, distribution, servicing, and marketing of database, middleware, and application software.

Competitors - IBM, MSFT , CA, SAP

Financials 2005 2006 2007

Total Revenue $11,799,000,000 , $14,380,000,000, $17,996,000,000
Net Income $ 2,886,000,000, $ 3,381,000,000 $ 4,274,000,000

Net Income has grown by an average of 21% the last few years. The recent quarter saw a 23% rise in net income. Oracle has been on an acquisition binge over the last few years acquiring over 30 companies . It appears these acquisitions are paying of financially based on the solid top and bottom line growth. ORCL is trading at a forward P/E of less than 18 and a trailing P/E of 25 . Considering the solid earnings growth, ORCL justifies a P/E of 30 or even 35 especially, when you compare it to competitors and other tech giants such as IBM MSFT SAP CSCO INTC that trade at similar multiples yet, have not displayed the same type of earnings growth.

Technically, ORCL has been range bound the last few years between $10-15 before finally breaking out above $15 last year and trading in a $15-20 range. The current breakout above $20 is very positive from a technical standpoint. Provided the overall markets hold up, I think ORCL has a good chance of making a run to $30 by years end. Support is around the breakout point of $19.75 and the 50 day moving average and uptrend line round $18.

MARKET RECAP

Once again the bulls ruled except for a slight hiccup around midday, stirred up by King Hals weak profit forecast.

The S&P 500 had its best 2 day gain since last August.

Solid housing starts announced today were the major factor in the market advance.

Palm was up on takeover speculation. The new Treo smartphone has been getting rave reviews and appears to be a product that can put a dent in the Blackberry.

Oracle and Adobe are two companies that are reporting solid profit growth after the bell. Shares in both companies are up in after hours.


The FED announcement is tomorrow. Rates are expected to be kept unchanged. It appears the bulls have the upper hand for now but, we all know that a 2 day 180 point rally can be wiped out by the likes of 400+ and 242 point drops that we have seen in the last 3+ weeks.