Oracle Corporation (NYSE:ORCL) — Oracle is a leading provider of enterprise technology software, solutions and hardware. Standard & Poor’s projects that Oracle will increase revenues from 1% to 4% annually from fiscal year 2017 (May) to FY 2019.
Cloud-related products and structures are a strong segment, accounting for 12% of revenues in the fiscal second quarter (Nov). This success was due in large part to the $6 billion purchase of five specialized cloud software companies. S&P has placed their highest rating, a five-star buy, on Oracle with a price objective of $47, after a raise of $3 in mid-December.
Even though revenues rose by only 1% in FQ2, Cloud rose 62%. Further, S&P is optimistic over “potential positive catalysts related to the (Donald) Trump administration.”
ORCL pays an annualized dividend of 60 cents, for a 1.5% yield. Dividends have been paid each year since 2000.
ORCL bottomed at under $34 in January 2016, then rallied to a high at $42 in March. Since then, the stock formed a rectangle with support at about $38.50 and resistance at $41.50. The last top produced a gap at $40.74 to $40.22, and Friday’s close above its 200-day moving average will most likely continue higher and close that gap.
Accumulation increased on Friday, and momentum could push prices through the resistance at $41.50. Friday’s momentum also produced a fresh MACD buy signal. Thus, buy ORCL at under $40 with a trading target of $48 for a proposed trading gain of 20%.
A stop-loss order should be placed at $37.50. Investors should also consider ORCL for its long-term participation in the cloud-computing segment of the Information Technology (software) industry.
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