Oracle develops,
manufactures, markets, distributes and services database and middleware
software, applications software and hardware systems (computer server and
storage devices). The company has grown
earnings at an 18% rate over the last ten years. It has paid a dividend for only four years;
and that dividend has grown from $.05 per share to $.30 in 2013. ORCL
has consistently earned a 25%+ return on equity. This outstanding performance should continue
as a result of:
(1) its dominant
industry position making it a prime beneficiary of above average industry
growth,
(2) focus on
high margin products,
(3)
acquisitions,
(4) highly
innovative R&D effort,
(5) share
buybacks.
Negatives:
(1) there are
substantial integration costs associated with the recent acquisition on Sun
Microsystems,
(2) its numerous
acquisitions has led to goodwill and intangible assets equaling 40% of total
assets; in addition, integrating these acquisitions are a distraction from its
core business,
(3) intense
competition.
Statistical Summary
Stock Dividend Payout
# Increases
Yield Growth Rate Ratio
Since 2009
Ind Ave 2.3 15* 35 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
Ind Ave 14 16 NA 17 NA
*many companies in ORCL ’s
industry pay no dividend
Chart
Note:
ORCL stock made great progress off its March 2009 low, quickly surpassing the
downtrend off its July 2008 high (straight red line) and the November 2008
trading high (green line). Long term the
stock is in an uptrend (blue lines); though it is sitting right on the lower
boundary of that trend. The wiggly red
line is the 50 day moving average. The
Aggressive Growth Portfolio owns an 85% position in ORCL. The stock is currently on the Aggressive
Growth Buy List. The lower boundary of
its Sell Half Range is $59.
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