NASDAQ:ORCL
$23.52
(2/9 1:32PM)
+1.7%
| Open | $23.47 |
Mkt Cap | $115.9 Billion |
| High | $23.72 |
52Wk High | $25.64 |
| Low | $23.25 |
52Wk Low | $13.80 |
| Volume | 17.8 Million |
Avg Vol 10D | 33.6 Million |
ORCL Stock Evaluation
A downgrade has occurred this week for ORCL because of eroding valuations. Since our last rating change that occurred on 07/25/2009, ORCL’s price has risen by $1.22, or 5.46%. With no substantial improvements to fundamentals, this stock looks less attractive as the stock price has risen.
Recommendation Summary
As of this week we are downgrading ORCL, the full rationale is detailed in the report that follows. We have compared this stock versus its historically normal valuation ranges in order to find out where ticker stands, compared to what the market has traditionally been willing to pay for a given set of fundamental factors. In addition to that historical study, we also consider how the broad market and sector performance are affecting this security.
The market has gone up fairly substantially over the last twelve months and many of our valuations have become more negative as prices have increased. In the case of ORCL, the Technology sector has actually outperformed the market over that twelve month time frame. So, we are downgrading ORCL partially because the sector and NASDAQ look slightly less appealing. Oracle Corporation is being downgraded to our Fairly Valued rating because of an erosion in fundamentals. Prior to this week's downgrade, we rated the stock as Undervalued as of 07/25/2009.
ORCL's price has increased by 2.12% since our last report.
Because there has not been a significant change in earnings estimates, the reason for the downgrade of ORCL is that the share price has crossed over a pricing threshold.
ORCL Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at ORCL through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 7.01x and 4.37x respectively.
Utilizing this range we can see that ORCL’s current Price to Sales per share ratio of 4.22x is significantly below its average levels historically. In fact, with a current price of $23.55, ORCL is a full 26% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for ORCL.
ORCL Cash Earnings
Looking at ORCL specifically in their Cash Earnings capabilities, Ockham views ORCL as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for ORCL, the current level of Cash Earnings compared to its historical levels helps identify where ORCL is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 23.88 and a historical low Cash Earnings per share ratio of 14.76, an investor can relate where value becomes optimal.
So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for ORCL? From the Ockham perspective, we are looking specifically at ORCL to see if the market is recognizing the huge disparity between ORCL's past stock price to Cash Earnings ratio to today's levels. At a difference of 22% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at ORCL. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.
ORCL Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.
Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from ORCL against the historic high and low levels over an available data range. Because ORCL has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In ORCL’s case, the estimated annual dividend is $0.20 producing a current dividend yield of 0.85%. The highest dividend yield from ORCL in recent history was 1.45% while the lowest dividend yield was 0.00%. It's hard not to notice that ORCL pays a current dividend yield that is 17.24% above the historical median. This peaks our interest since our analysis looks favorably upon dividend yields that are greater than the historical median.
Holding ORCL Stock? See What Is Being Discussed on Power Lunch
As always, the latest news on ORCL is available to Ockham clients through RazorWire, and it was mentioned recently on Power Lunch.
Oracle Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Due to deterioration in our valuation, we downgraded ORCL as of Sunday, February 07, 2010. Ranking all stocks in terms of news coverage offers some interesting data. In the case of ORCL, it is getting significantly more attention in recent news coverage than we are used to seeing. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… Here at the nasdaq, it's really powered right now by the biggest of the big caps, microsoft, we've got apple, cisco, and ORACLE, all up between 1. 5% and 2%. …”
See Who is Talking About News from ORCL on Tech Trader Daily-Barron's
News has broken via the television and viral blogs regarding ORCL, so investors should take an interest in learning what was said.
Oracle Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Due to deterioration in our valuation, we downgraded ORCL as of Sunday, February 07, 2010. Ranking all stocks in terms of news coverage offers some interesting data. In the case of ORCL, it is getting significantly more attention in recent news coverage than we are used to seeing.
“… “Those issues include a convoluted product strategy, loss of market share to ORACLE, and trouble adapting to the cloud computing model. …”
Squawk On The Street Discussed ORCL in Relation to M&A Activity
While we do not know the details relating to ORCL and any possible deal, our RazorWire news analytics has noticed a mention of the stock near a conversation about M&A activity.
We have recently (Sunday, February 07, 2010) downgraded this stock due to deteriorating fundamentals. In comparison to the other stocks that we follow, Oracle Corporation has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. The Ockham valuation currently has a Fairly Valued stance on ORCL because it trades within the price range that we would expect given current market conditions and fundamentals. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.
“… Cisco systems and the company's plans to hire up to 3,000 new workers and that news followed plans a week earlier from ORACLE to hire a net 1,000 new jobs to help with the ... …”
Notice a Discussion Covering ORCL Appeared Recently in the Financial News
Oracle Corporation is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Seeking Alpha Wall St Breakfast.
We have recently (Sunday, February 07, 2010) downgraded this stock due to deteriorating fundamentals. The Ockham valuation currently has a Fairly Valued stance on ORCL because it trades within the price range that we would expect given current market conditions and fundamentals. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. In comparison to the other stocks that we follow, Oracle Corporation has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days.
“… Vodafone signs deal with ORACLE. Vodafone (VOD) reached a four-year agreement with ORACLE (ORCL) to provide voice, data and management services to employees in the European, ... …”
See Why Oracle Corporation News Was Discussed on Closing Bell
News has broken via the television and viral blogs regarding ORCL, so investors should take an interest in learning what was said.
Based on our methodology, Oracle Corporation should hold some appeal to value investors as we view it as Undervalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Ranking all stocks in terms of news coverage offers some interesting data. In the case of ORCL, it is getting significantly more attention in recent news coverage than we are used to seeing.
“… 5% and ORACLE is up better than 1%. The nasdaq is up about 9%. Most of them are to the downside. The reason why even though you. …”
Oracle Corporation News is Being Covered Right Now on Squawk On The Street
The latest news from Squawk On The Street on ORCL is available through Ockham's news analytics platform RazorWire.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. In comparison to the other stocks that we follow, Oracle Corporation has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. At present, Ockham has a valuation stance of Undervalued on ORCL, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… Intel is higher as is ORACLE. Take a look at sienna as we continue to watch other technology stocks as well. It is down 1. 5% downgraded at barclays. …”
Power Lunch Discussed ORCL in Relation to M&A Activity
RazorWire captured a discussion on Power Lunch that contained talk of M&A activity and ORCL was mentioned as well.
In comparison to the other stocks that we follow, Oracle Corporation has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on ORCL, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… The news from ORACLE, it would be laying off a thousand workers was muted by the plan to add 2,000 sales jobs as part of the plan to again rate $1. …”
Notice a Discussion Covering ORCL Appeared Recently in the Financial News
News has broken via the television and viral blogs regarding ORCL, so investors should take an interest in learning what was said.
Based on our methodology, Oracle Corporation should hold some appeal to value investors as we view it as Undervalued. Ranking all stocks in terms of news coverage offers some interesting data. In the case of ORCL, it is getting significantly more attention in recent news coverage than we are used to seeing. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… I think we start to see a big upgrade, and ORACLE is talking $1. 5 billion over the next year and we're getting signs of a recovery. > > jim goldman, thank you so much. …”
Oracle Corporation Talked About Near M&A Discussion on Squawk On The Street
News broke today regarding mergers and acquisitions and Oracle Corporation was discussed as well on Squawk On The Street. Other sources will be required to know exactly what the context was in the discussion.
When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that Oracle Corporation has been talked about more than normal recently. We consider ORCL as Undervalued at the current price of $23.48. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. The Motley Fool CAPS data suggests that investors believe Oracle Corporation will beat the market in the foreseeable future.
“… 4 billion merger with ORACLE closed. Choosing twitter to get the word out, that's certainly raising some eyebrows. Scott mcnealy will also be leaving the company that helped ... …”
The Latest News for ORCL Was Just on Mad Money
As always, the latest news on ORCL is available to Ockham clients through RazorWire, and it was mentioned recently on Mad Money.
When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that Oracle Corporation has been talked about more than normal recently. The Motley Fool CAPS data suggests that investors believe Oracle Corporation will beat the market in the foreseeable future. We consider ORCL as Undervalued at the current price of $23.79. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.
“… >> boo-yah, scott, how are you? I'm very good. >> caller: glad to hear that. Two of my favorite stocks are hpq and ORACLE. …”