6/11/24 - $orcl - not best reward for risk in this tape. pass.6/11/24 - vrockstar - NYSE:ORCL - literally wrote this prior to the last quarter (when i wasn't publishing publicly) and not much has seemed to change:
seems fairly valued all else equal "uninteresting" at current levels which implies 10 bn FCF discounted at 3% which seems to be about the norm for above average software. i'd be more interested at the 4-4.5% level which implies a reasonable downside from here otherwise have better horses
what's new? it's not a mag 7. when you divide "ORCL/QQQ" - you go back to the 90s! in other words, it's not really been the best nasdaq horse. is it still relevant? yes. is there still potential in the "data centers and data aggregators etc. are the new hot thing" - yes. i'm not an anti-ORCL stonker but for 10% EPS growth? what am i paying for scale (yes scale) here? 20x? most? 2x PEG. this isn't 15%, it's not 20%, it's 10%. 20x on $5.5 of EPS power puts you a bit above $100. so while the recent quarter was a pop and stick - you didn't get much more run. i don't see the value of necking out on this one if you're looking to outperform the index. i'd either go even lager in cap or something that's smaller i've written about in software, NYSE:YOU , NASDAQ:NICE , NYSE:S , even NYSE:IOT (which you'll pay more for - but has great LT legs).
conclusion: dip buy this, don't bet on the breakout and rip higher in the current tape - it's too much risk vs. return. i'll probably short the stock if we find ourselves in the mid 130s (as a funding for longs I like). otherwise i wish you the best if u own it no hard feelings. :)
take care today fam
V
