by Ian Harvey
IMPORTANT NOTE: There is no stop-loss or pre-determined sell price recommended – this is left to the discretion of the individual trader.
Wednesday, 14th September, 2016
Oracle Corporation (NYSE:ORCL) Calls
**OPTION TRADE: Buy the ORCL OCT 21 2016 40.000 call at approximately $1.25. Sell price is left to your own judgment.
Oracle Corporation (NYSE: ORCL), a provider of products and services that address all aspects of corporate information technology (IT) environments, including application, platform and infrastructure, will report its fiscal first-quarter numbers on September 15. The quarterly report is due after the market close, with the consensus calling for earnings of $0.58 per share and revenue of $8.70 billion for the quarter.
During the same period last year the company earned $0.53 per share, and the stock is up 11.0% on the year.
Oracle is coming off a mixed fiscal fourth-quarter report, in which the company missed on the bottom line, while reporting better than expected revenue. Wall Street overlooked the earnings miss, and while the stock traded sideways immediately following the report, shares have trended higher since the report, and have been in a sideways pattern for the last two months.
Analysts expect an earnings beat, with the street’s whisper number sitting a penny above the consensus at $0.59 per share. If the company is able to hit that number, and post another better than expected revenue figure, the stock should easily break out of its sideways pattern and climb to a new 52-week high. ORCL has a P/E of just 19.5, and with earnings forecast to rise 25.3% this year and 8.7% next year, there is still plenty of room to the upside for the stock.
Oracle is gaining optimism that business trends are improving. In fact, consensus estimates call for the database titan to post 3% higher sales to mark its first uptick in that metric since the final quarter of 2014.
Oracle, which already enjoys a leading position in the enterprise software and database management system (DBMS) software market, has also been gaining ground on its cloud endeavors. Specifically, the company’s offerings in SaaS, PaaS and Big Data divisions have gained significant momentum in the past few quarters.
In fourth-quarter 2016, total cloud revenues, including infrastructure as a service (IaaS), were up 49% (up 51% on constant currency basis) to $859 million. Cloud SaaS and PaaS revenues jumped 66% year over year (up 68% on constant currency) to $690 million. Moreover, SaaS and PaaS billings surged 38% year over year, driven by an expanding customer base.
Oracle expects this momentum to continue in fiscal 2017. For the first quarter, the company anticipates SaaS and PaaS revenues to grow in the range of 75% to 80%. Further, total revenues are expected to grow in the range of 2% to 5%, while non-GAAP earnings are estimated to be in the range of 56 to 60 cents per share, on a constant currency basis.
Four investment analysts have rated the stock with a sell rating, fourteen have issued a hold rating, twenty-five have given a buy rating and one has given a strong buy rating to the stock. Oracle Corp. presently has a consensus rating of “Buy” and an average price target of $44.54.
Oracle Corp. has a 50 day moving average price of $41.07 and a 200-day moving average price of $40.28. Oracle Corp. has a 52 week low of $33.13 and a 52 week high of $42.00. The company has a market capitalization of $165.65 billion, a PE ratio of 19.41 and a beta of 1.08.
Tuesday, 13th September, 2016
Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) Calls
**OPTION TRADE: Buy the CBRL SEPT 16 2016 155.000 call at approximately $1.55. Sell price is left to your own judgment.
Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL), a casual dining chain, will report its fiscal fourth-quarter numbers on September 14. The company will post its quarterly numbers before the market open, with the consensus calling for earnings of $2.10 per share on revenue of $741.9 million. During the same period last year the company earned $1.97 per share on revenue of $719.2 million.
Cracker Barrel has a solid history of posting better than expected quarterly reports, and Wall Street expects another beat this quarter. The street has a whisper number of $2.12 for the quarter. The stock has been trending lower over the last two months, but a decent quarterly report should help bring strength back into the stock. With the street calling for a beat of two pennies, there is an increased chance of another earnings beat and shares moving higher on the news.
The stock has a P/E of 19.3, and with earnings forecast to rise by 10.7% this year, and 10.2% next year, the stock appears to be very reasonably priced. If the company is able to hit the $2.12 whisper number, it would translate to year over year earnings growth of 7.6%.
Cracker Barrel shares are riding high heading into the restaurant chain's earnings report on Wednesday. The stock has significantly outperformed industry peers, and surged 20% higher so far in 2016.
There are good reasons for that bullishness on the part of investors. Operating income jumped by 21% last quarter thanks to cost cuts and steadily rising demand on both the retailing and food service sides of the business. Cracker Barrel's bottom-line margin is 6.4% of sales over the last nine months, marking a major improvement over the prior year period's 5.5%.
The company last posted 2.2% higher retail comps and 2.3% higher restaurant comps, which is roughly what management has projected for the current quarter.
Why Cracker Barrel?
Cracker Barrel's distinctiveness in the retail-restaurant sector lies in the fact that apart from serving food, its restaurant establishments have old-country feel along with unique gift shops that offer rocking chairs to seasonal gifts. Again, the outlets offer home-style country food without alcoholic beverages -- a contrast to typical casual dining restaurants.
Notably, even without offering any alcoholic beverage, the company had positive comparable store restaurant and retail sales growth and continued to outperform the casual dining industry during the fiscal third quarter. Its operating income has increased by nearly 20%. During the third-quarter earnings call, the company raised its full-year EPS forecast based on its year-to-date results.
Even in the preceding quarter, Cracker Barrel hiked its quarterly dividend by 4.5% to $1.15 per share from $1.10.
For the fiscal fourth quarter, the Consensus Estimate for earnings stands at $2.10 a share, an increase of 6.8% year over year, while the consensus mark for revenues is pegged at $742 million, implying 3.2% year-over-year growth.
One research analyst has rated the stock with a sell rating, four have given a hold rating and three have issued a buy rating to the company. The company presently has a consensus rating of “Hold” and an average target price of $165.83.
Cracker Barrel Old Country Store Inc. has a market cap of $3.52 billion, a PE ratio of 19.3 and a beta of 0.38. Cracker Barrel Old Country Store Inc. has a 52 week low of $118.01 and a 52 week high of $172.89. The firm’s 50-day moving average price is $156.81 and its 200 day moving average price is $155.58.