Comedian Rodney Dangerfield built an entire career around the phrase "I don't get no respect." Oracle
Do these numbers make me look fat?
For the quarter ended Aug. 31, there's plenty to like about Oracle. In fact, there's quite a lot you'll flat0out love. Versus the same quarter last year:
- Total revenue is up 12%.
- Operating margin is up, from 25% to 32%.
- Profits are up 36%.
- TTM operating cash flow was $12.8 billion, up 46%.
- The company has $13.1 billion in cash and no debt.
These numbers range from pretty bloody good to absolutely fabulous. OK, gross margin was down a hair, from 82% to 80%. But c'mon, 80% is a killer gross margin in anyone's book, annihilating peer IBM's
I love you, you're perfect, now change
In this two-speed economy of ours, consumers may not have money to spend, but companies do. Corporate balance sheets are healthier than ever, and Oracle sells primarily to just these types of cash-flush businesses. More than half of Oracle's revenues come from business services and software updates, both of which are sticky and high-margin.
Also, Oracle's core database, server, and applications businesses don't face the same sort of disruptive competition that, for example, threatens Microsoft's
Why do Fools fall in love?
Fools recognize an awesome value when they see it. Trading for just under $30 per share with a very reasonable P/E of 17, that's exactly what Oracle is.
Why such a low price and valuation? It's the hard limit the market seems to put on all "aging" tech stocks these days, like CA Technologies
But to be Foolish is to be contrarian. Show some respect to Oracle, and to your portfolio, and think about picking up a few shares of this underpriced, undervalued company.
At the very least, add Oracle to My Watchlist, a free service of The Motley Fool. It's an easy way to keep track of the stocks on your investing radar.
Fool contributor John Grgurich worries that these stocks make him look fat, but he doesn't own shares of any of the companies mentioned in this article. The Motley Fool owns shares of Oracle, Microsoft, and IBM. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has an absolutely scintillating disclosure policy.