Put five Fools in a room, ask them how they invest, and you'll likely get five different answers. Some like growth, others value, or small caps, or dividends, or, well, you get the picture.
While our styles may differ, we all want excellent, engaged managers running the companies we own. We like it even more when these managers are also owners -- investors like you and me, who, in trying times like these, are willing to buy as others sell. That's why I write this column weekly.
The week's buying
So which rich executives are buying now? Have a look, courtesy of our friends at Form 4 Oracle:
|
Company |
Closing Price 1/20/09 |
Total Value Purchased |
52-Week Change |
|---|---|---|---|
|
A. Schulman (NASDAQ:SHLM) |
$14.90 |
$196,450 |
(19.4%) |
|
Greenbrier Companies (NYSE:GBX) |
$5.27 |
$513,289 |
(67.9%) |
|
Oracle (NASDAQ:ORCL) |
$16.10 |
$163,400 |
(19.9%) |
|
Stericycle (NASDAQ:SRCL) |
$48.58 |
$1,019,097 |
(13.5%) |
|
Worthington Industries (NYSE:WOR) |
$10.03 |
$20,000 |
(28.6%) |
Sources: Fool.com, Yahoo! Finance, Form 4 Oracle.
Seeing Oracle's future
My belief that database market leader Oracle will help make me rich one day is no secret. All computing -- even Web computing -- is database-driven, and Oracle has a durable franchise in database software.
For the uninitiated, a database is like a file cabinet for digital information. Some are incredibly sophisticated; others are like a collection of index cards. But computing tends to be ineffective without a means to store and easily retrieve found or created data. Databases fulfill this need -- Oracle's databases more than most.
Researcher IDC ranks Oracle tops in the market for relational databases, which accounted for $18.8 billion in 2007 revenue. Our 125,000-strong Motley Fool CAPS community likes that position:
|
Metric | |
|---|---|
|
CAPS stars (5 max) |
**** |
|
Total ratings |
2,582 |
|
Bullish ratings |
2,399 |
|
Percent Bulls |
92.9% |
|
Bearish ratings |
183 |
|
Percent Bears |
7.1% |
|
Bullish pitches |
313 |
|
Bearish pitches |
38 |
Data current as of Jan. 20, 2009.
Many sense a competitive advantage in how Oracle sells. "Customers are locked and there are huge switching costs!" recently wrote CAPS investor pro00.
There's truth to that. Oracle's systems aren't cheap. A new database appliance, built in concert with Hewlett-Packard (NYSE:HPQ), sells for more than $1 million. Imagine buying one of those; you'd be loath to unplug it, as you would any hardware or software you've committed to. Hundreds of companies are committed to Oracle, and they all pay annual maintenance fees for the privilege. Those fees cover training, support, and software upgrades, among other services. But they also help Oracle produce billions in predictable free cash flow year-after-year.
Competition from cloud computing upstarts such as salesforce.com (NYSE:CRM) could threaten contracts, but probably not enough to permanently damage the business.
"Business will look to invest precious dollars during the downturn, not to grow outside revenue, but to perfect internal efficiencies to give competitive advantages," wrote CAPS investor ironcowboy in late December. "[Oracle] can assist business attain this overall goal of improving internal information system efficiency. ORCL offers business a way to be efficient and thus more competitive."
Former Akamai CEO George Conrades would appear to agree. Exactly one week ago, he bet a little more than $163,000 on shares of Oracle. His investing record with insider purchases is mixed, but Conrades knows enterprise software and the demands of large customers: He was a top manager at IBM before joining Akamai.
There's your update. See you back here next week when we dig through more insider filings in search of the next home run stock.
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