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"It is not sufficient that I succeed - all others must fail."

Genghis Khan

Investment gurus are buying Oracle (NYSE:ORCL) while insiders sell. If the team may no longer trusts the boss, a recent deal with salesforce.com (NYSE:CRM) might have convinced big investors that Larry Ellison has finally made his big cloud move. That means everybody else goes down.

"False cloud" no more

Salesforce chief Marc Benioff once said Oracle was selling customers a "false cloud," but he can't say that any longer: his company announced in June it will "standardize" on some Oracle products, even hardware. Oracle CEO Larry Ellison, known for downplaying the importance of the cloud, may now be invading like his hero Genghis Khan.

He already owns a good chunk of NetSuite (NYSE:N), whose revenue grew 35% last quarter, beating earnings estimates by $0.03 a share. Ellison's been profiting from the cloud while dismissing its significance. With the Salesforce agreement his company is, too. (Fool)

Here comes Genghis Kahn

Fiercely competitive Oracle CEO and co-founder Larry Ellison remains a legend in the software business. He worships Genghis Kahn, founder and emperor of the Mongol Empire all those years ago. Living by his famous quote (see above) has allowed Oracle to thrive through all manner of disruptive changes in technology. It now boasts 390,000 customers - including every Fortune 100 firm.

Even disappointing Wall Street the past two quarters, the stock falling 10% - blaming the global economy and sales force - Oracle remains a cash-flow machine:

*Last year they generated $14.2 billion in operating cash flows.

*They've grown an average of 19% per year over eight years.

*They have $32.2 billion on-hand.

The company returned almost 90% of its $14 billion in operating cash flow to shareholders in the form of dividends and share repurchases this year.

Oracle takes cloud seriously

A variety of acquisitions ramps up Oracle's presence in cloud computing, like deals with RightNow, Taleo, and Eloqua. The annual run-rate of their cloud business is already over $1 billion, larger than Workday (NYSE:WDAY) and SAP (NYSE:SAP) combined. New customers include British Telecom (NYSE:BT), BMC Software (NASDAQ:BMC), Siemens (SI), Yahoo (NASDAQ:YHOO), and Intuit (NASDAQ:INTU).

Beyond the heightened M&A activity, Oracle has the benefit of its massive infrastructure. Their cloud system processes a billion transactions per day with:

*13,000 virtual machines

*70 petabytes of storage

*Across seven countries

In addition to its partnership with Salesforce.com, Oracle announced a deal with its old nemesis Microsoft (NASDAQ:MSFT).

Investment gurus are buying Oracle

Oracle was the most-purchased stock of gurus in the second quarter with 20 net buys (30 bought while 10 sold). With the fall-off in the stock, the valuation of Oracle's shares is certainly attractive. The forward price-to-earnings ratio is only 9. (InvestorPlace)

On the Peter Lynch chart it appears undervalued. After a sharp drop in the first quarter and another in the second, Oracle's stock is down 1.59% year to date. For its fiscal 2013 fourth quarter, the company reported flat year-over-year revenues at $10.9 billion, and 10.9% higher GAAP earnings of $3.8 billion.

A market cap of $151.98 billion and shares trading around $32.82 yields a:

*P/E ratio of 14.40

*P/S ratio of 4.20

*Dividend yield of 0.60%.

With an annual average earnings growth of 20% over the past 10 years, GuruFocus rated Oracle Corporation the business predictability rank of 5-star. (Forbes)

Insiders are selling Oracle

There have been 4,144,577 shares sold by insiders with zero shares purchased this year. Sales appear to be accelerating:

Insider Shares Sold (2013)

May2,909
June552,500
July2,962,500

DISCLOSURE: Safra Catz sold 2,960,000 shares on July 15-17. She's been President of Oracle Corporation since January 2004, a member of the Board of Directors since October 2001, and Chief Financial Officer as of April 2011.

Listen to investment gurus or Safra?

Insiders sell stock for all manner of reasons, but investment gurus only get in for one: because they want to make money. Sure, there have been no insiders buying Oracle shares the past month or so. With a forward P/E ratio of 10.31, a book value of $9.54 per share, and a dividend yield of 1.48% - and all those gurus wanting in - the answer seems clear enough.

Bet against the insiders.

Source: Oracle: Genghis Khan Invades The Cloud