ORCL

The Next Industrial Revolution – Internet of Things

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Image Source: Skyworks Summary: ·        The Internet of Things has been called ‘the next Industrial Revolution,’ and the revolution is already well underway. ·        Explosive growth can be expected in the number of devices connected to the Internet in coming years, and the data extracted from such devices will enable businesses to make significant value creating improvements to operations. ·        The proliferation of the Internet of Things will take a combined effort from the end user of the technology to smart device manufacturers to software providers to networks. ·        The newsletter portfolios have significant exposure to early large-cap adopters of the IoT. We love the potential we see in some of our favorite names to capitalize on ‘the next Industrial … Read more

Oracle Remains Confident on Transition to Cloud

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Image Source: Peter Kaminski By Kris Rosemann Oracle (ORCL) is still working to transform its operations to a cloud-based business model, but it is already selling more new software as a service (SaaS) and platform as a service (PaaS) annually recurring cloud revenue than any other company in the world, including key competitors Salesforce.com (CRM) and Workday (WDAY). Oracle competes in large SaaS markets that Salesforce.com does not, such as Enterprise Resource Planning (ERP) and Human Capital Management (HCM). After many years of developing the most complete ERP suite in the cloud, Oracle Fusion ERP is the overall market leader in the enterprise cloud ERP market. The firm has more than 10 times the number of ERP customers than Workday, … Read more

The Corporate Buyback Conundrum

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The above is a trailing 15-month chart of the broad market index, the S&P 500 (SPY). As you can see, the markets have gone nowhere fast. The fallout in the energy complex coupled with emerging market uncertainty and political unrest in the US is making for quite the choppy market environment. Interestingly, however, since the middle of last year, the Best Ideas Newsletter portfolio has quietly been distancing itself from this broad market benchmark, as strong performance from constituents coupled with a larger cash position in a generally weaker market have paid off. Where indexers focus on controlling costs instead of focusing on generating strong returns with relatively low turnover (and commission and tax implications), the strategy powering the Best … Read more

Oracle’s Cloud Performance Leaves a Hazy Overall Outlook

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After reporting fourth quarter and full year results for fiscal 2015 on June 17, Oracle (ORCL) shares took a significant hit. It is easy to see the effect foreign exchange rates had on the quarterly results, but there is more to the miss than meets the eye. In the fourth quarter of fiscal 2015, Oracle reported revenue of ~$10.7 billion, a decrease of 5% as reported, or an increase of 3% on a constant currency basis. Driving the top line lower was a decrease in software and cloud revenue, more specifically new software licenses, where sales dropped 17%; new software licenses make up more than 20% of total revenue. Attempting to offset this significant drop was strong 29% growth in … Read more

Stocks Catapult Back To Near All-Time Highs

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It appears that we may get a Santa Claus rally after all. Call it window dressing. Call it drinking at the Fed’s punch bowl. Call it what you will. But the Dow Jones Industrial Average (DIA) polished off its biggest two-day gain in six years to propel itself back to near all-time highs again. The S&P 500 (SPY), shown above, is now within throwing distance of setting new record ground, and spirits remain high as we approach the Christmas holiday and New Year. Collapsing prices at the gas pump, though highlighting risks to global economic growth, may be helping to spread the holiday cheer. For clarification, we continue to be optimistic about the future returns in the newsletter portfolios, but … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Software: Adobe Keeps Rolling; Oracle Hit by Venezuela Forex Issues

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On Thursday, Adobe (ADBE) put up better-than-expected fiscal first-quarter performance and issued a strong outlook, while Oracle’s (ORCL) fiscal third-quarter results faced currency challenges and its forward guidance came in about as expected. Adobe achieved revenue of $1 billion, at the high end of the targeted range (and above consensus), and exited the fiscal first quarter with an impressive 1.84 million paid Creative Cloud subscriptions, an increase of 405,000 on a sequential basis. Adobe Marketing Cloud quarterly revenue jumped 24% during the period, to $267 million, a nice showing. Diluted earnings per share on a non-GAAP basis came in at $0.30, beating the consensus figure by $0.05. The fiscal first-quarter results were solid, but the company’s outlook was even better. … Read more

Oracle Steals the Headlines

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Last week was a busy week for Oracle (ORCL). On December 18, the tech giant reported fiscal second-quarter results that showed non-GAAP revenue advance 2% (up 3%, excluding the impact from the strengthening US dollar). Non-GAAP new software licenses and cloud software subscription revenues fell modestly (though it annualized a high-teens growth rate in the year-ago period), while non-GAAP new software license updates and product support revenues jumped 6%. Hardware Systems revenues, including hardware systems products and hardware systems support, were essentially unchanged. Non-GAAP operating income fell modestly on a still-very-healthy non-GAAP operating margin of 46%. Non-GAAP net income nudged 1% higher, but share buybacks bolstered non-GAAP earnings per share expansion to 9%, excluding the impact from a strengthening US … Read more

Oracle Guides Lightly While Ellison Sails

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Enterprise tech giant Oracle (click ticker for report: ) posted modest results for its fiscal year 2014 first quarter Wednesday that were mostly in-line with the company’s prior guidance. Revenue increased 2% year-over-year to $8.4 billion, a touch below consensus estimates. Earnings-per-share on a non-GAAP basis was 12% higher than the year-ago period at $0.59. Free cash flow for the quarter was phenomenal at $6.1 billion, equal to 73% of revenue. CEO Larry Ellison was notably absent from the conference call as he sails in the America’s Cup. Software Drives Revenue Expansion Hardware revenue was weak, with product sales falling 14% year-over-year to $669 million (hardware systems support revenue, however, advanced a modest 3% year-over-year to $592 million). President Mark … Read more

Was Cisco’s Fiscal Year 2014 Guidance a Red Flag?

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Technology heavyweight Cisco (click ticker for report: ) reported solid results for its fiscal year 2013 fourth quarter Wednesday afternoon. Revenue increased 6.2% year-over-year to $12.4 billion, a touch above consensus estimates. Earnings-per-share was also strong, increasing 11% year-over-year to $0.52, also a few cents above consensus expectations. Free cash flow for the fourth quarter tallied $3.7 billion, equal to an impressive 30% of total revenue. For the full-year, free cash flow was $11.7 billion, or 24% of revenue. Cisco has been one of our better calls in the land of technology. Below, please find our rating track record of the firm (listed most recent to least recent). Our rating history for each firm in our coverage universe can always be found … Read more