Oracle Corporation (ORCL) Offers Decent Value

Page 1 of 2

Oracle (ORCL)Oracle Corporation (NASDAQ:ORCL) is one of the few large cap companies that have solid earnings as well as great growth prospects. Oracle’s business is strongly protected against competition due to high customer switching costs. It’s very difficult for a customer to leave Oracle and go to a competitor. As a result, Oracle has stable and highly predictable recurring revenue.

That being said, Oracle’s performance in the stock market hasn’t been remarkable in the past several quarters. Oracle is essentially a debt free company, with $33.7 billion of cash and short-term investments against only $18.5 billion of debt. This results to approximately $15 billion of surplus cash, or $3 per share.

I feel that Oracle’s stock is preparing itself for a mild uptrend in 2013. In this article, while I focus on the positive catalysts for the stock, I also address the near-term concerns for the company.

Oracle: The big brother in cloud computing

Oracle Corporation (NASDAQ:ORCL)’s cloud solutions serve large corporations who rely on its products to run critical business operations. Providing reliability, security and privacy are Oracle’s top priorities for its clients. Oracle’s Software-as-a-Service (SaaS) for large corporations are very capable of addressing such primary concerns.

Since Oracle’s products have very high switching costs, as I mentioned above, migrating away from the company requires extensive planning and testing, including running both Oracle and new systems in parallel for an extended period of time. I feel this is a huge competitive advantage for Oracle.

Oracle’s large customer base

Oracle has 390,000 customers around the globe, and serves all of the top Fortune 100 companies. Such an economic moat is built on its wide SaaS model, and Oracle is expanding it through both R&D and acquisitions.

But now Oracle is facing serious problems in serving cloud SaaS, and a majority of IT execs are already considering leaving Oracle. However, the battle has just begun and Oracle is massively updating its software and revamping its SaaS business model to retain customers.

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

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

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

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!