Oracle Corporation: Setting the information management standard

The efficient management of information is a vital component of business success. The world's leading supplier of information management software is headquartered in Redwood Shores, California. Its technology supports the work of 98 of the firms in the Fortune 100.

Oracle Corporation (NASDAQ: ORCL) provides database, middleware, and computer application software for managing business data and supporting business operations. Essentially, the programs facilitate functions in data storage/access, analytics, customer relationship management, supply chain management and software development. The firm provides a wide variety of consulting, training and licensing services. Products are sold through Internet service providers, network integrators, resellers, independent software vendors and system integrators.

Oracle pleased investors late last month, when it reported Q3 EPS of 25 cents and revenues of $4.4 billion. Analysts had been expecting 22 cents and $4.33 billion. Management also guided Q4 revenues to $5.43-5.63 billion, versus consensus of $5.53 billion.

ORCL shares broke through 90-day moving average resistance on the news and have since been defining a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the shares with thirteen "strong buys", nine "buys", fourteen "holds" and three "sells". Analysts see a fourteen percent growth rate, through the next year. The ORCL Price to Free Cash Flow ratio (10.19), Sales Growth rate (26.80%), EPS Growth rate (31.58%), Operating Margin (32.61%), Net Profit Margin (23.32%), Return on Assets (13.73%), Return on Investment (17.50%) and Return on Equity (25.74%) compare favorably with industry, sector and S&P 500 averages.

Institutions own about 56% of the outstanding shares. The stock is one of those used to calculate the S&P 100 Index, the S&P 500 Index and the Nasdaq 100 Index. Over the past twelve months, it has traded between $13.07 and $19.75. A stop-loss of $16.00 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.