With shares of Oracle Inc. (NASDAQ:ORCL) trading at around $35.48, is ORCL an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
If we get right to the point, then all you need to do is look at the max chart for Oracle. There is a saying on Wall Street that the winners keep winning. Oracle is a prime example. This often stems from great leadership, which Oracle most certainly possesses.
Oracle has shown consistent profits and revenue growth for many years, margins are high, strategic acquisitions have been made and will continue to be made, cash flow is good, the balance sheet is strong, and the stock’s performance has been impressive. So…what’s not to like? Why has short interest increased over the past few weeks?
Increasing short interest is likely due to the possibility for a dramatic slowdown in earnings going forward. However, Oracle is wise enough to know how to plan for a rainy day. It’s too early to tell if the Taleo, RightNow Technologies, and Eloqua (NASDAQ:ELOQ) will pay off, but keep in mind that even if they don’t, Oracle can afford to keep firing away. Another way for Oracle to offset any bad news is to increase dividend payments, or to announce a buyback. Another important note is that Oracle survived the financial crisis of 2008/2009 better than almost any other tech company on the planet.
The news is good so far, but what about the numbers?