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Time to eject Oracle Corp. (NYSE: ORCL)?

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Today, we are going to evaluate Oracle Corporation (ORCL) so as to get clarity on this organization and its current standing from a fundamental perspective. In that process, we hope to give some insight into what this stock may offer as an investment opportunity for prospective investors. To accomplish that, we will be moving from top to bottom in our evaluation. As such, our first point of focus will be a look at the company from a revenue perspective.

Over the course of the prior fiscal quarter, the company saw sales of 9.19B. That number needs context to grant us any insight: by comparison, we can see an overall change in revenues, on a quarterly year/year basis, of 0.06%. However, in sequential terms, the situation looks a little different, with sales decline by -0.18% from quarter to quarter. While revenue analysis gives us a strong sense of changing demand trends in the company’s end market, and how the company is executing in terms of its relationship with potential customers, real shareholder value is only truly created by profitability. With this in mind, we turn to the company’s bottom line data.

Oracle Corporation (ORCL) may offer even more interest as an object of analysis if we zoom in a bit more and look at some of its core trends. For example, the cost of selling goods last quarter was 2.34B, which yielded a gross basic income of 6.84B.

The company’s recently reported data shows total diluted outstanding shares of 4.28B, which implies an overall EPS (or earnings per share) of 0.52. To give the reader a little context that number compares to an analyst consensus expected value of 0.73 in next fiscal quarter EPS data. Next, let’s look ahead at coming performance based on what analysts are projecting for the company more generally, before closing with a survey of the balance sheet and cash flow. Among analysts, the average recommendation for this stock is Overweight. That number represents the product of the work of 36 analysts. It is important to consider the views of the analyst community even though we don’t suggest taking analyst recommendations as face value plans for action in a portfolio. The primary value of looking at analyst opinions is in knowing what sort of views may already be priced into the stock.

If we look at price targets, we can see that analysts currently have things pegged around an average target at about 55.79. When we look at next year, we can things shake out in terms of estimates of a fiscal year forecast to bring about 3.16 in terms of total EPS. That works out to a median P/E ratio basis valuation of right around 15.13 times earnings.

So far, we have covered how the company is doing on both the top and bottom line, as well as what professional analysts believe about its core trends and operational and financial performance going forward. However, we would be remiss if we did not also take a quick look at cash flows and the company’s balance sheet to round out our perspective on the name.

The last thing we like to look at for a company like is the balance sheet. That really is the heart of the company’s ability to weather tough times, and the basis for an experienced investor’s sense of the real downside risk inherent in a stock. So, as we like to see, the balance sheet is the seat of faith for the market. In this case, for ORCL, the company has about 21.32B in cash in the bank, according to its most recent reports. That cash sits opposite about 5B in total current liabilities on the ledger. But balance sheet health isn’t a fixed idea. Trends matter. And the best way to understand real risk, particularly where debt levels are concerned, is to trace a line connecting the past with the future. In this case, the company’s debt has been falling. The company also has 133.6B in total assets, balanced by 77.23B in total liabilities. That should put things into perspective quite a bit more in terms of how one can justify the current market cap of the stock.

Finally, we want to take a peek at cash flows. In this case, the company saw free cash flowing at 6.09B last quarter, which represents a net change for the quarter in cash levels of (463M). That works out to about 6.57B in terms of cash flow on a net operating basis.

This is certainly an interesting story and one we plan to check back on soon.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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This info on The Gap, Inc. (GPS) could trigger a massive change in trading

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Stock of The Gap, Inc. (GPS) opened today at $27.04 and are currently trading at $27.45 x 1700. More than 2,154,449 shares have exchanged hands compared to an average daily volume of 5,789,596 shares. At the current pps, the market capitalization stands at 10.81B. Analyst are currently predicting a target of $26.47 for The Gap, Inc.

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. The Gap, Inc. (GPS) currently has a Beta value of 0.42. Beta is a measurement of a stock’s price fluctuations, which is often called volatility and is used by investors to gauge how quickly a stock’s price will rise or fall. A stock with a beta of greater than 1.0 is riskier and has greater price fluctuations, while stocks with beta values of less than 1.0 are steadier and generally larger companies. Beta is often measured against the S&P; 500 index. An S&P; 500 stock with a beta of 2.0 produced a 20 percent increase in returns during a period of time when the S&P; 500 Index grew only 10 percent. This same measurement also means the stock would lose 20 percent when the market dropped by only 10 percent.

Next, let’s take a look at The Gap, Inc current P/E ratio. The Gap, Inc. (GPS) currently has a PE ratio of 13.13. PE ratio is an important parameter to look at when trading a stock mostly because it is easy to calculate. There are a couple of ways to calculate PE ratio either by dividing share price by earnings per share or dividing the market cap by net income. It is important to note that the earnings are usually taken from the trailing twelve months (TTM). Nevertheless, P/E tells us how much an investor is willing to pay for $1 of a company’s earnings. The long-term average P/E is around 15, so on average, investors are willing to pay $15 for every dollar of earnings. Another useful way to look at this: Turn the P/E ratio around to look at the E/P ratio, which when expressed as a percentage gives us the earnings yield. For instance: 1/15 gives us an earnings yield of 6.67%.

While we have already looked at The Gap, Inc beta and P/E ratio, the EPS cannot be ignored. The Gap, Inc EPS for the trailing twelve months was 2.1. Traders and investors often use earnings per share (TTM) to determine a company’s profitability for the past year. So in essence, EPS is the amount of a company’s net income per share of common stock. Earnings per share equal the company’s net income less any dividends paid on preferred stock divided by the weighted average number of common stock shares outstanding during the year. The Gap, Inc is estimated to release its next earnings report on Nov 16, 2017. It would be interesting to see how the earnings fair out considering the recent developments.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Schlumberger Limited (SLB) could lose another bull

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Stock of Schlumberger Limited (SLB) opened today at $63.15 and are currently trading at $62.79 x 200. More than 2,945,221 shares have exchanged hands compared to an average daily volume of 6,744,792 shares. At the current pps, the market capitalization stands at 86.81B. Analyst are currently predicting a target of $77.55 for Schlumberger Limited (SLB).

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Schlumberger Limited (SLB) currently has a Beta value of 0.82. Beta is a measurement of a stock’s price fluctuations, which is often called volatility and is used by investors to gauge how quickly a stock’s price will rise or fall. A stock with a beta of greater than 1.0 is riskier and has greater price fluctuations, while stocks with beta values of less than 1.0 are steadier and generally larger companies. Beta is often measured against the S&P; 500 index. An S&P; 500 stock with a beta of 2.0 produced a 20 percent increase in returns during a period of time when the S&P; 500 Index grew only 10 percent. This same measurement also means the stock would lose 20 percent when the market dropped by only 10 percent.

Next, let’s take a look at Schlumberger Limited (SLB) current P/E ratio. Schlumberger Limited (SLB) currently has a PE ratio of 491.97. PE ratio is an important parameter to look at when trading a stock mostly because it is easy to calculate. There are a couple of ways to calculate PE ratio either by dividing share price by earnings per share or dividing the market cap by net income. It is important to note that the earnings are usually taken from the trailing twelve months (TTM). Nevertheless, P/E tells us how much an investor is willing to pay for $1 of a company’s earnings. The long-term average P/E is around 15, so on average, investors are willing to pay $15 for every dollar of earnings. Another useful way to look at this: Turn the P/E ratio around to look at the E/P ratio, which when expressed as a percentage gives us the earnings yield. For instance: 1/15 gives us an earnings yield of 6.67%.

While we have already looked at Schlumberger Limited (SLB) beta and P/E ratio, the EPS cannot be ignored. Schlumberger Limited (SLB) EPS for the trailing twelve months was 0.13. Traders and investors often use earnings per share (TTM) to determine a company’s profitability for the past year. So in essence, EPS is the amount of a company’s net income per share of common stock. Earnings per share equal the company’s net income less any dividends paid on preferred stock divided by the weighted average number of common stock shares outstanding during the year. Schlumberger Limited (SLB) is estimated to release its next earnings report on Jan 18, 2018 – Jan 22, 2018. It would be interesting to see how the earnings fair out considering the recent developments.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Time for a Turnaround at Finish Line for Xunlei Ltd. ADR (NASDAQ: XNET)

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Well-rounded due diligence on a stock should take into account a basic analysis of core company trends such as top-line and bottom-line performance, margins, analyst views, cash flows, and overall balance sheet health. But that’s not all. One must also take a dispassionate, professional survey of a stocks technical characteristics.

For that, we must turn to the chart. Todays object of technical analysis is Xunlei Ltd. ADR (XNET).

We will start our analysis by examining overall direction of trend. In the most basic sense, we can see that XNET has been working in a bullish posture on a larger timeframe, as indicated by the relative positioning of the 50-day and 200-day simple moving averages. In other words, if the 50-day moving average is trading above the 200-day, it is traditionally seen as a bullish chart trend. Conversely, if the 50-day moving average is trading below the 200-day, it is traditionally labeled a bearish trend or bearing. As noted, for XNET, that adds up to a bullish designation the main point being that we have money flows leaning in a generally positive direction for the stock.

Next, we will turn to our analysis of the primary oscillating indicators to assess the degree to which the stock is stretched in its movement at present. The key tools for this analysis are the 14-day Relative Strength Indicator (RSI) and the 20-day fast stochastic. In each case, the point is to measure overbought or oversold behavior ie, whether the stock has gone too far too fast in one direction or the other. If we see a score above 75 (overbought) or below 25 (oversold), history suggests one is wise to expect some reversion to the mean. For XNET, we can see that our 14-day RSI shows a score of 85.87%, while the 20-day fast stochastic reports a score of 87.62%.

Next, we will turn to key levels of interest on the chart, with an emphasis on Fibonacci retrace points, range extremes, and major moving averages. In this case, the critical 38.2% level drawn off the 52-week high of $7.15 sits at $5.61. XNET also has additional resistance above at the stocks 200-day simple moving average, which sits at $ 3.86.

We also want to look at relative performance and overall volatility scoring to understand value and risk in play. XNET has moved $+2.80 over the past month or so. Over the trailing 100 days, the stock is outperforming the S&P 500 by 93.92%. This movement has come on a less volatile bearing from one day to the next relative to the broader market, according to the stocks 36-month beta.

Similarly, we can see that the stocks recent action has come on a historical volatility score of 92.48%. To get that score, one has to take the standard deviation of returns for a random trading input assuming buying the stock at a given average price during the specified period. On a more basic level, one might look at the 20-day ATR as a percentage of its 20-day moving average. That measure gives us a volatility score of 7.17%.

Finally, we?ve spent some time looking at price as a factor in many forms and from many angles. But what about volume? Notably, many chartists see volume as more indicative for conviction in bearing or pattern than price measures, averages, or oscillators. Volume records the true degree of participation involved in a stock. If price pattern is like a word written on a word processor, volume is like the font size and punctuation. In this case, we want to examine relative volume measures to get a feel for interest in the stock of late. Right now, this stock has been showing strong relative volume, which indicates interest among those making a market for shares of the stock, and that should be seen as a key factor in drawing conclusions about your level of interest as well.

That wraps up todays analysis, but we will be sure to check back on this stock again soon.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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