Getting set up for tomorrow. Intending to add small to ORCL (first add since '06).
It's a value stock again (imo).
Superb profit margins in each of past ten years. P/sales is high of course, but has dropped now to a nine year low. Meanwhile sales keep increasing -- per Yahoo: Qtrly Revenue Growth (yoy): 24%. D/e about 50/50. (Which is high relative to the industry) Cash&cash equiv about equal debt.
P/E on S&P Oper. EPS 2009E = 13.3. Average p/e hasn't been that low in a decade. Low p/e for the year in past decade was 5 (an anomaly in '99), next lowest for the year was 14 in '98.
S&P rates it 5*: "Our risk assessment reflects potential acquisition integration risks faced by the company following
a series of large purchases over the past several
years. This is offset by our view of ORCL's strong
balance sheet, considerable free cash flow, and
what we see as a deep management bench."
With ORCL's 80,000+ employees, their software is embedded in a lot of companies. Perhaps a margin of safety???
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The thing is, if it were any other market, I suspect a couple or a few or maybe some of us would jump all over ORCL at current price. Many might even agree: a tech/growth stock at a value price. In this current stock market though, it's ho-hum. Many stocks are beckoning. And they become cheaper each day. So it's just so easy to say yet one more decently-valued stock, with no compelling reason for committing funds to right now. Nevertheless, I believe I see the value, so I am buying a little. |
