Oracle stands tall in database software

Question: Should I brace for the worst with my shares of Oracle Corp.?

-- D.L., via the Internet

Answer: Like all technology firms, it is facing weakened economies in the United States and abroad that have a negative impact on the companies that typically buy its products.

Oracle shares are down 12 percent this year following last year's 32 percent increase and a 40 percent gain in 2006. The company has expressed caution about its near-term prospects.

Nonetheless, its dominant position in database software gives it a degree of pricing power most other technology companies can only dream about. At midyear it enacted 15 percent to 20 percent across-the-board price increases for its U.S. customers.

It also possesses the solid finances and cash flow to grow by acquiring companies, having spent more than $30 billion during the past three years to buy smaller software firms. Its $8.5 billion acquisition of BEA Systems closed in April.

The company's market share in database software, which is the foundation of every information system, edged up to 49 percent last year from 48 percent in 2006, according to the Gartner market research firm. IBM ranked second at 21 percent and Microsoft third with 18 percent.

Oracle also is gaining ground in enterprise software, those integrated applications that support and streamline business activities. It has lately expanded into applications for the insurance and health-care industries.

Presence in a variety of information technology areas allows it to offer "one-stop shopping" to companies that prefer not to have to deal with multiple providers.

Consensus rating of Oracle shares by Wall Street analysts is "buy," according to Thomson Financial, consisting of 11 "strong buys," 10 "buys," six "holds" and three "underperforms."

The company faces increased competition from lower-cost support providers for Oracle products. Germany's SAP is a formidable foe and the leader in business applications, and Oracle's database software is a maturing business.

Earnings are expected to be up 15 percent for the current fiscal year ending in May and 15 percent for the next fiscal year.

Q: I am unhappy with my shares of Fidelity Value Discovery Fund. Are they still worth holding?

-- P.F., via the Internet

A: Recent events haven't been kind to its portfolio, which emphasizes financial stocks. Trimming back some energy holdings didn't help either.

Nonetheless, its significant holdings in JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. represent surviving banks that avoided most of the excesses of their peers. The fund also adroitly trimmed back its General Electric Co. stock because of the company's stressed financial business.

All this requires that an investor look beyond near-term results to see the light at the end of the tunnel. The fund, which is able to move around various market capitalizations, has an overall strategy of investing in securities undervalued in relation to a firm's assets, sales, earnings, growth or cash flow.

The $1 billion Fidelity Value Discovery Fund is down 45 percent during the past 12 months to rank in the lowest one-third of large growth and value funds. Its three-year annual return of a 7 percent loss places it in the top one-fourth of its peers.

"I currently have Fidelity Value Discovery rated as a 'hold,' " said Jack Bowers, editor of the independent Fidelity Monitor newsletter in Rocklin, Calif. "I think probably the worst is over and, though we're not there yet, at some point the financial sector will outperform."

The fund has been managed since its December 2002 inception by Scott Offen, who previously managed several of Fidelity's industry funds. Although he is an accomplished stock picker, he is not yet one of the investment firm's most proven managers. Because Offen doesn't hang on to winners forever because he sees downside risk in doing so, the portfolio tends to have high turnover.

This "no-load" (no sales charge) fund requires a $2,500 minimum initial investment and has an annual expense ratio of 0.87 percent.

Author: Andrew Leckey @ Tribune Media Services

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Oracle Acquires Primavera

Oracle has announced that it is to acquire Primavera, a software company that focuses on enterprise project portfolio management, PPM. Financial terms of the deal were not disclosed.

The acquisition follows Oracle’s moves to expand its services, transport, and construction, STC, business. While Oracle already has a significant existing client base in project-intensive industries, through a combination of core technology assets, middleware, Siebel, E-Business Suite, PeopleSoft, JD Edwards, and Agile, there is still heavy supplier fragmentation in those markets.

By acquiring Primavera, it has started to arm its salesforce with stronger arguments to push for highly lucrative enterprise licensing agreements.

Source: www.computerwire.com

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Oracle Falls After SAP Says Global Crisis Hurt Sales (Update1)

Oracle Corp., the world's second- largest software maker, fell in Nasdaq trading after rival SAP AG warned its sales growth will trail forecasts as customers put orders on hold amid the global financial crisis.

Oracle dropped $1.18, or 6.1 percent, to $18.30 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have declined 19 percent this year.

SAP tumbled 16 percent in Frankfurt trading after saying a ``very sudden and unexpected drop in business activity'' will lead to lower-than-anticipated earnings this quarter. Last month, Oracle forecast profit that beat analysts' estimates, reassuring investors a worsening economy wasn't eroding profit.

"SAP's miss today is causing some investors to worry the economy may catch up with Oracle'' this quarter, said Pat Walravens, an analyst with JMP Securities in San Francisco.

Oracle Chief Executive Officer Larry Ellison has spent more than $34.5 billion on acquisitions since 2005 to add customers who buy maintenance contracts, relying on those support fees to preserve profit as technology spending slows. Such fees account for more than half of sales.

Deborah Hellinger, a spokeswoman for Oracle, didn't respond to an e-mail and phone call seeking comment today. The Redwood City, California-based company said Sept. 18 that second-quarter profit will climb to as much as 36 cents a share, excluding some costs. Analysts in a Bloomberg survey at the time estimated 35 cents on average for the period, which ends Nov. 30.

SAP is based in Walldorf, Germany.

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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