Oracle Corporation (ORCL), International Business Machines Corp. (IBM): Why I Bought More of This IT Company

Page 1 of 2

It’s rare that I recommend watching a movie in order to try to understand investing, but in this case I strongly suggest finding the time to look at the late great Akira Kurosawa’s masterpiece ‘Rashomon.’ The film is about the relativity of truth and depicts how three different people recall (in contrasting fashion) what is broadly the same event. Tech investors will have an inkling of what I ‘m talking about already because International Business Machines Corp. (NYSE:IBM) became the latest company to disappoint with earnings. The problem is that the reasons for these misses are becoming ever more varied.

Time Heals Everything

Oracle Corporation (NASDAQ:ORCL)IBM’s great rival Oracle Corporation (NASDAQ:ORCL) also gave weak results recently and insisted they were largely due to sales execution. Fast forward a few weeks and Fortinet Inc (NASDAQ:FTNT) (IT security) and F5 Networks, Inc. (NASDAQ:FFIV) (application delivery controllers) both argued that their telco verticals were weak in the quarter. Red Hat, Inc. (NYSE:RHT) missed estimates and Verizon Communications Inc. (NYSE:VZ) discussed an ongoing cautious spending environment amongst enterprise customers. Tibco Software Inc. (NASDAQ:TIBX) missed and guided lower and gave its–now all too familiar– refrain that its sales execution wasn’t up to scratch but that it would all be sorted out soon enough. Although frankly I think it would be just as interesting to now hear what the sales guys said about the management.

Just as with Rashomon, all we do know now is that we have dead body on the scene even if the exact story isn’t entirely clear.The good news is that we can get a bit more detail from the crime scene.

Let’s put it this way: if it truly is a question of a bit of excess caution being caused by political uncertainty over the sequester (Oracle’s quarter end fell on the deadline) then as companies report through the ongoing earnings season we might expect to get a bit more color on any pick-up in demand. Indeed, I think International Business Machines Corp. (NYSE:IBM) may well have just done that. Oracle Corporation (NASDAQ:ORCL)’s numbers ran to the end of February while IBM’s ran to the end of March. A lot can happen in a month.

Who Said What

In essence Oracle said that it expected to bounce back in its Q4 and that the pipeline was up significantly. Its miss was largely a result of sales execution and timing issues rather than competitive losses or businesses walking away from future deals or even trying to reduce the size of them. Tibco Software Inc. (NASDAQ:TIBX) said a similar thing.

Fast forward to International Business Machines Corp. (NYSE:IBM), and in the latest report we hear about issues relating to sales execution, the timing of Easter, the sequester, $400 million of software and mainframe revenues rolling in to the next quarter, the weather and even the change in the Chinese Government.

The conclusions of which led to some disappointing revenue growth numbers for IBM in the quarter.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!