Oracles software sales have seen tremendous growth, with software license sales of $4 billion and total software revenue of $8 billion. The Oracle Cloud did well enough to increase the company’s software business and if revenues continue they will be in line to match the lagging hardware system business, helping Oracle continue its growth in 2013. Oracle announced its purchase of SelectMinds on Wednesday, a recruiting, could-based, software.
Earnings were up in 2012 $0.24 from 2011, and are expected to grow an additional $0.21 in 2013 to $2.67. Earnings perform seasonally, starting Q1 at a low and gradually growing with the best performance in Q4. Earnings are projected to be $0.53 for Q1 2013, a five-cent growth.
Oracle stock has been in an up-trend since late May, up $7.00 to open today at $32.60. The stock is up 27.5% year-to-day with a 52-week range of 24.91 – 33.81. The market cap is 159.95B. Oracles biggest competition, SAP (SAP) and IBM (IBM) are trading up 36.77% and 12.03% respectively.
Options traders are bearing on ORCL with 41% of trades today being bearish and only 23% bullish. The ATM implied volume is 23.4 and the Oct ATM 33 straddle is implying a $1.83 move, or 5.5%. Oct open interest calls are highest at the straddle and Oct open interest puts are biased lower, highest at the 31 strike price.
My trade is to buy the Oct 31-34 Call condor for $0.30. My risk is $0.30 and my reward is $0.70. My break-even points are at $31.30 and $33.70.