Posts Tagged ‘ORCL’

Free Cash Flow Growth Led by Strong Cost Cutting and a Tad of Financial Engineering

November 8th, 2010

If equity markets represent the flawless leading economic indicator generally believed, investors should be very comfortable nowadays. After all, the S&P 500 is up almost 12% so far this year. Yet, economists remain generally concerned.

Is it not then unreasonable to ask:   Are the glorious headlines trumpeting rising free cash flows portending a sustainable and durable continuation of the economic expansion or perhaps the result of severe cost cutting with a dose of imaginative accounting?

» Read more: Free Cash Flow Growth Led by Strong Cost Cutting and a Tad of Financial Engineering

IBM: A Case For Sam Palmisano firing Sam Palmisano

September 21st, 2010

In this article we look at evidence that strongly suggests IBM (IBM), despite being turned into a cash “machine,” has done so not through its own R&D efforts, but rather through massive cost cutting. And its strategy is errily similar to that of Hewlett-Packard (HPQ), even prior to today’s announcement of a $1.7 billion acquisition, its second large announced deal over the past week.

» Read more: IBM: A Case For Sam Palmisano firing Sam Palmisano

New Age Security Analysis

September 13th, 2010

If one values a share of stock using the same analysis and judgment as that of owning a US Treasury bond, they would consider its worth to be the present value of its tax-adjusted free cash flows plus a terminal value; for that is how bonds are indeed valued.
» Read more: New Age Security Analysis

Is Oracle’s (ORCL) 7% Rise Today Justified?

September 7th, 2010

In March 2005, shares in NCR Corp (NCR) tumbled over 17% the day it was announced Mark Hurd, its CEO, would leave the company to join Hewlett-Packard (HPQ). At NCR, Hurd had cut costs while increasing revenues, and as a result, free cash flow grew substantially. As the shares in NCR were falling on the date of announcement, stock in Hewlett-Packard rose over 10%.

» Read more: Is Oracle’s (ORCL) 7% Rise Today Justified?

Superior Management Manifested in Value Creation–Good-bye Mr. Ballmer?

July 23rd, 2010

Sometimes it’s better not to hire your friends, admittedly some late advice for former Bear Stearns executives.  For Bill Gates, it’s definitely not to late given the superiority in Microsoft’s strength and consistency in its  cash flows. However, enough time has gone by to render a verdict on the leadership ability of Steve Ballmer. For Microsoft (MSFT), the tables below are telling, as we compare some important metrics to those of Oracle (ORCL), its largest and most important competitor.


Return of the “Hostile” Takeover?

July 19th, 2010

Sounds crazy, no?

Given corporate Boards remaining relentless in cash maximization policies, alongside reluctance to spend without a confident payback period, the obvious outlet is stepped-up acquisitions. Given a strategic free cash flow-based acquisition, firms could put themselves in a position of stepping up their return on invested capital, given the very low cost of debt that might need to be raised to fund the purchase. A well-priced and timed acquisition can significantly add to shareholder value, while of course, an ill-priced, ill-executed  and poor candidate would severely destroy value.