Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: Tom_ who wrote (10754)	5/14/1999 5:30:00 PM
From: John Carson	Read Replies (1) \| Respond to of 19080

One more opinion from an analyst. Graham Tanaka of Tanaka Capital Management talks to CNBC at 12:11 pm today. ORCL 24 3/16 +1 3/16. Tanaka states that investors believe that all ORCL customers are done with their buying for this year. The growth in terms of Y2K will be great, much to the contrary of investors. This company will do well and have good net growth as it has in the past.

To: Tom_ who wrote (10754)	5/14/1999 10:20:00 PM
From: Maverick	Read Replies (1) \| Respond to of 19080

ML is bullish on ORCL near-term & long term, rates LT BUY No News is Good News Analyst Day Recap Oracle management hosted its bi-annual Analyst Day meeting yesterday at its corporate headquarters in Redwood Shores. In this case, no news was good news. The company did not preannounce results and management was actually moderately positive on the current quarter, indicating that the pipeline close rate was actually ahead of plan and much healthier than last quarter. More than half of the company's business always closes in the last month of the quarter, so there is still much work to be done, but pipeline feedback was a significant near-term positive. During Analyst Day, the E-business message rang loud and clear. All members of the Oracle management team were singing in unison: E-business is the life blood of Oracle's future. 15-20% of Oracle's current revenue steam is pure e-business, and the hyper growth in that segment is masking the declines in ERP related business. 70% of Fortune 100 base their e-commerce strategy on Oracle technology and we believe Oracle is very well positioned to become a primary provider of technology for the next massive economic and technological cycle, but has to ride out near-term transition. We expect Oracle's revenue mix and cost structure to modify over next 2-3 years. Consulting growth likely will slow as Oracle hands off opportunities to consulting partners (stops competing) to drive higher volume of large deals. Company “eating its own home cooking” could result in significant internal cost savings and drive further margin expansion. We are still guarded about near-term risks to financial performance in this difficult demand environment as Oracle makes the transition with its new technology cycles such as CRM 3i, Applications 11i, and Oracle 8i. This being said, however, we believe Oracle could stage a near-term rebound as the negative sentiment preceding Analyst Day fails to live up to the hype. There was no earnings preannouncement (as speculated on CNBC), management did not try to actively guide estimates down, and pending 4Q 99 is tracking stronger than anticipated through first two months. There is no change to 4Q 99 estimates, although our high end of “Street” estimates are still at risk. Our 4Q 99 estimates remain: revs of $2.85 bil (+18.5%) and EPS of $0.35 (+28%). We believe ORCL is significantly undervalued for investors with 12-18 month time horizon. ORCL currently trades at 20x our CY 00 EPS of $1.15 for 25-30% EPS growth. We believe the rapid increase in exposure to e-commerce will be a major growth driver for CY 2000. Estimates (May) 1998A 1999E 2000E EPS: $0.64 $0.86 $1.06 P/E: 35.9x 26.7x 21.7x EPS Change (YoY): 34.4% 23.3% Q4 EPS (May): $0.27 $0.35 Cash Flow/Share: $0.71 $0.94 $1.14 Price/Cash Flow: 32.4x 24.5x 20.2x Dividend Rate: Nil Nil Nil Dividend Yield: Nil Nil Nil Opinion & Financial Data Investment Opinion: C-2-1-9 Mkt. Value / Shares Outstanding (mn): $34,408 / 1,496 Book Value/Share (Feb-1999): $2.25 Price/Book Ratio: 10.2x ROE 1999E Average: 38.7% LT Liability % of Capital: 13.0% Est. 5 Year EPS Growth: 25.0% Stock Data 52-Week Range: $41 3/16-$12 1/8 Symbol / Exchange: ORCL / OTC Options: Chicago Institutional Ownership-Spectrum: 42.9% ML Industry Weightings & Ratings** Strategy; Weighting Rel. to Mkt.: Income: Underweight (07-Mar-1995) Growth: Overweight (07-Mar-1995) Income & Growth: Overweight (07-Mar-1995) Capital Appreciation: Overweight (28-May-1993) Market Analysis; Technical Rating: Below Average (29-Mar-1999) Intermediate term opinion last changed on 12-Mar-1999. The views expressed are those of the macro department and do not Investment Highlights:* · We believe Oracle could stage a near-term rebound as negative sentiment preceding Analyst Day fails to live up to the hype. · No change to 4Q 99 estimates, although our high end of “Street” estimates are still at risk. Company did not try to actively guide any estimates down, as was feared. · We believe ORCL is significantly undervalued for investors with 12-18 month time horizon. Stock trades at 20x our CY 00 EPS of $1.15 for 25-30% EPS growth. Our 12-18 month price objective of $34 is based on a 32x P/E multiple of $1.06. Fundamental Highlights: · No news is good news. Company did not preannounce and was actually moderately positive on the current quarter. · E-business is the life blood of Oracle's future. 15-20% of Oracle's current revenue steam is pure e-business, Apps growth could accelerate as early as the current quarter · We believe Oracle is very well positioned to become a primary provider of technology for the next massive economic and technological cycle, but has to ride out near-term transition.