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Oracle Corporation is an American software company. Ranked second in terms of revenue from this activity (after Microsoft). It is also the largest manufacturer of software for organizations.
Despite the fact that the company is a technology company, its share price has remained practically unchanged since the beginning of the year (+ 4.3%). In late August, the company filed for the purchase of TikTok’s US arm. The company is Microsoft’s main competitor. However, the company’s shares have a relatively low multiple for the tech sector. This may be partly due to the company’s high debt burden. However, Oracle is doing quite well with it, the interest coverage ratio is currently 20. It is also important that the company pays dividends annually. The current dividend yield is 2% per annum.
Although the company is in the technology sector, the company’s shares are not overbought. Judging by the company’s financial indicators, it is promising in the long term, mainly due to the high marginality of the business. Net profit margin in recent years has been 25-30%. The company’s shares are much less volatile than those of the largest tech giants, but Oracle has shown steady growth for many years.
Moreover, forward P / E is 12, which is quite an attractive investment compared to other technology companies. Thus, the company’s shares are definitely worth buying at a price below $ 50, but even the current price looks attractive for a long-term investment.
Aravana Capital Management provides clients with profitability even during downturns in global equity and bond markets.