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Oracle Corp.: Tech Bounce Opportunity

Apr. 06, 2018 10:36 AM ETOracle Corporation (ORCL)XLK, YY9 Comments
Musings of a Banker profile picture
Musings of a Banker


  • Tech stocks have been beaten up since peaking on March 12. An escalating trade war and privacy issues remain headwinds, and present a bargain-hunting opportunity.
  • Look for stocks that have dropped more than 10% in the past month, are up over the last year, and have positive expectations.
  • Oracle is a quality, battered company with Wall Street and quant valuation models forecasting appreciation, and negligible China exposure.

Photo Credit: Oracle.com

Playing a Tech Bounce

Facing headlines of a trade war with China and privacy issues, the Tech sector has gotten beat down, creating an opportunity to bargain shop. Now is the time to be aggressive and grab a great stock at depressed values.

The Tech sector peaked on March 12 based on the proxy Technology Select Sector SPDR ETF (XLK), and has dropped by nearly 7.5% since. Finbox.io's stock screener makes quick work of finding stocks ready to rise from the ashes.

Candidates were narrowed down initially by setting the filters to look for Information Technology stocks with at least a $1 billion market cap that have fallen 10%+ over the last month but had positive gains over the last year. This screen also looked for expectations of 15%+ upside using both the average price target based on at least five analysts and finbox.io's fair value model.

These filters returned five tech stocks that have recently tripped up, but have a positive trend and are undervalued from the perspective of qualitative and quantitative analysis. For a comparison of the results, valuations multiples were added along with beta and fair value Uncertainty. The view below sorts the stocks by their Enterprise Value-to-Free Cash Flow multiples.

Source: Finbox.io

To round out the picture, technicals were also included to ensure that the stocks have not fallen too much. A drop of more than 10% below the 50-day moving average indicates that support may have been broken. Another indicator of momentum is how close the stock is to its 52-week high, where a higher percentage shows better investor sentiment.

From this screen, Oracle Corporation (NYSE: NYSE:ORCL) and YY Inc. (Nasdaq: YY) look the most interesting based on the momentum qualities noted above, plus low EV/FCF multiples and low Uncertainty, which is a

This article was written by

Musings of a Banker profile picture
Finbox is an online stock research platform designed for individual investors and asset managers who care about understanding a stock’s fundamental value. The platform provides a quick sanity check so that investors can understand what they’re investing in and why.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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