The PE you got is calculated based on actual income. Last quarter the
actual earning was reduced to 1c last week, but the operational income
stays at 15c/share. Because most automatically calculated PEs are
based on actual earnings, that restatement increases the PE. Luckily,
that is not the way Wall Street works. Using real operational income,
the current trailing PE is about 38. When ORCL was at all-time high several weeks ago, the trailing PE was around 50. Assume ORCL just meets the earnings every quarter until the end of FY98 (JUN98), assume at that time the trailing PE is somewhere in between at 45, that will give ORCL a price of 50, a 47% increase from the current level.
I actually want to see the short interest on ORCL. I have a
feeling that short interest dramatically increased on ORCL during the
past month. I found a technical analysis site and did an analysis on
oracle. It basically tells me based on pure technical analysis
ORCL is a short sell candidate with very very poor technicals. Just
two days ago, ORCL broke out a double bottom which is a very bearish
sign. All moving averages are pointing downward, the stock broke then
resistance around 36. In any case, shorts feel comfortable shorting
ORCL because the company has no real news to share in the short term,
and the next earning report is 2 month away. If it is indeed the case
that most of the damages are caused by short selling, then when the
overall market reverses itself the rebound will be very powerful.
That is where the potential excitement is. Whether you are a short
or long there is a lot of excitement about this stock at this price,
this is the time to place your bet. Don't be discouraged by the
stock price, there are plenty of interests in this stock. |
