Will Oracle Corporation’s $13 Billion Buyback Plan Pay Off?


Last month, Oracle (NYSE: ORCL ) shocked the investing world as longtime Chairman and CEO Larry Ellison announced a huge corporate shakeup, vacating the CEO spot in favor of co-chief executives Mark Hurd and Safra Catz. Between the shift in the C-suite and the company’s disappointing financial results for the quarter, most analysts paid little attention to Oracle’s announcement that it had authorized a stock repurchase plan under which it could spend as much as $13 billion on its shares. Given the software giant’s struggles in the industry, though, some wonder whether buybacks are the best use for Oracle’s capital. Let’s take a look at Oracle’s past share repurchases and whether the new buyback plan is likely to pay off.

Has Oracle done a good job with its past buybacks?

When you look back 10 years, you can see that Oracle has done a pretty good job of timing its buybacks. Major repurchases in 2005 and 2006 took advantage of relatively low share prices immediately before a run-up that resulted in Oracle stock doubling, and the company also took advantage of the 2008 bear market to increase its buybacks as well.


Since the financial crisis, Oracle has also been sensitive to its share price in timing buybacks. Huge increases to buyback activity in 2012 came at a time of weakness for the stock. In fact, this most recent repurchase authorization is a departure from past practice as it comes when the stock has been strong.

Should Oracle actually spend its money on buybacks?

A big stock buyback can help drive share prices up in the short run. But if they lead to less money being available for internal growth, then buybacks can backfire.

Recently, Oracle has faced some major challenges. Growth in revenue has slowed to a standstill in recent years, in stark contrast to software rival Microsoft (NASDAQ: MSFT ) and its stronger sales growth since 2010. Moreover, even though Oracle still sports high gross margins, they’ve also largely stopped climbing, even as IBM (NYSE: IBM ) has pushed its own margins higher by refocusing its efforts on more lucrative business segments.


One obvious area that Oracle could emphasize is its presence in cloud computing. The cloud segment is one of Oracle’s fastest-growing market niches, but it also gets just a tiny amount of its overall revenue from the cloud. Compared to the pace at which IBM and Microsoft have shifted their attention to cloud-based solutions, Oracle has been slowing coming out of the starting block. By acquiring hospitality- and retail-industry technology provider MICROS Systems for about $5 billion, Oracle hopes to jump-start its cloud business. Buybacks don’t appear to be hampering Oracle’s acquisition efforts.

Moreover, despite an increase in debt over the past couple of years, Oracle still has a healthy balance sheet with plenty of cash and short-term investments on hand. Even with a large buyback program, Oracle should still have a full range of potential strategic options at its disposal should the right opportunities arise.

Should Oracle boost its dividend?

Another option Oracle would have to return capital to shareholders would be to pay a dividend. With a current yield of just 1.3%, Oracle looks stingy from an income perspective compared to Microsoft, IBM, and other large tech companies.

Still, Oracle has made big strides on the dividend front since making its first payout in 2009. Since then, the company has more than doubled its quarterly dividend payments. Yet one thing the company hasn’t embraced is the practice of regularly increasing its dividend every year. Ellison’s huge stake in the company explains some of that reluctance, given the tax impact of dividends on his portfolio. Yet at least small dividend increases would be enough to satisfy many investors.

Will Oracle’s buyback pay off?

The key to remember with this latest buyback authorization is that Oracle doesn’t have to repurchase shares if it doesn’t want to. If the stock keeps climbing, Oracle might be better off leaving its authorized funds untouched, especially in light of the overall market’s shakiness. If a broad correction hits Oracle shares, though, following through on the buyback at that point could be hugely profitable.

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One Put, One Call Option To Know About for Oracle


As a result, one of the most popular criteria that people enter your list of stock options Stock options channel is 0.4% ORCL Oracle Corp. ( NYSE: ORCL ) . So this week we report an interesting contract of sale contract and an interesting call from December to ORCL maturity.
The contract of sale YieldBoost our algorithm identified as particularly interesting, in the year is $ 33, which is an offer at the time of writing 81 cents. Compiling the prize flow and return is 2.5% for the commitment of $ 33, or 3.7% annualized rate of return (which we call channel YieldBoost Stock Options).


Selling a put option gives the ‘ investors’ access is not a potential upside of owning shares would ORCL road, because the seller only sale ends shares held on the stage in which the contract is exercised. So, unless Oracle Corp. saw its shares fall 18% and a contract is exercised (resulting in a cost basis of $ 32.19 per share , gross of brokerage commissions , subtracting 81 cents to $ 33 ), the only positive aspect of this seller information is from the collection of the premium for the annualized rate of return of 3.7% .
It is interesting to note that the 3.7 % annualized actually exceeds the 1.2% annual dividend paid by Oracle Corp. 2.5%, based on the current share price of $ 40.22. Yet, if an investor was to purchase the shares at the market price in order to collect the dividend, no serious drawback because the ‘ action is expected to fall 18:01 % at the exercise price of $ 33.

Always important when it comes to dividends is that, in general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability of each company. In the case of Oracle Corp., looking at the chart of historical dividend ORCL below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 2 % annualized 1 dividend yield.


Trying to increase their income beyond the ‘ action back 1.2 % : Across the option string , called a contract of particular interest to the deadline of December , the shareholders of Oracle Corp. ( ORCL NYSE) stand dividend annualized. The sale of covered call around the year of $ 45 and collect the prize based on the offer of $ 1.12 ; annualizes at an additional rate of return of 4.2% compared to the current price (this is what options YieldBoost refer to as the Canal ) , for a total of 5.4 % annualized in the scenario where the action is not called away. Any increase above $ 45 would be lost if the stock goes up there and was forced to leave, but ORCL shares would increase by 11.8% compared to current levels for that to happen, which means that in the scenario the stock is called, the ‘ shareholder has earned a return of 14.6% from this level of trade, as well as dividends received before the name of the mother.


The following table shows the last twelve months of trading history for Oracle Corp., highlighting in green where the $ 33 strike on the story , and highlighting the year of $ 45 in red:

The table above and the historical volatility of the action, can be a useful guide in conjunction with fundamental analysis to assess whether the December sale or sale of options present in this article provide a rate of return that is a good reward to risk. Volatility estimate twelve months after Oracle Corp. (considering the last 251 days of negotiation ORCL historical stock prices using the closing values , as well as the current price of $ 40.22) 21%.

In trading on Monday afternoon, the sales volume of the S & P 500 was 648 750 contracts of components, with a call volume to 1.19 m, for a put: call ratio of 0.55 for the day today. Compared to the long-term average selling: call ratio of 0.65, which represents a very high volume of calls relating to the put; In other words, buyers prefer to call options trading today.

Oracle 1z0-209 Oracle Sample Question


Which of the following statements about Facility Modules is FALSE?

A. Portal Standard FMs are customizable
B. FMs are linked to the CM
C. Portal Policy FMs contain opcodes that implement Portal business logic
D. Portal Policy FMs are customizable
E. New FMs called Custom FMs can be created

Answer: A


Which of the following statements about a Product object in Portal pricing is TRUE?

A. Each event in a Product can only be mapped to one rate plan
B. An Item Product can contain the Cycle Forward Monthly Event
C. Default priority for a product is 1
D. The higher the priority number, the higher the priority is for that product
E. A and C

Answer: D

Oracle pulls 100 Programmers From Unfinished Cover Oregon Health insurance Exchange

Oracle Practice Exams

Oracle Corp., the giant technology company at the center of controversy which covers Oregon, has greatly reduced his army of software developers who are trying to save the site health insurance exchange in Oregon.
What it means for the Oregon Exchange – which has been riddled with errors and remains largely unfinished – is an open question. Acting Director Bruce Goldberg Exchange did not respond to a request for comment Wednesday afternoon.
Last week, about 100 employees of Oracle have emerged from the project covering Oregon, leaving about 65 in place. State officials have repeatedly accused his exchange website health failed in Oracle shoddy work and missed deadlines.
Even if the State had failed to pay Oracle, the two sides have maintained a truce with the company agreeing to substantially fix the most serious mistake free, records show. Now, however, the remaining employees of Oracle, according to multiple sources, that only works in the maintenance and operations. This means that the work of the company at the end of the site largely stopped – permanently or not remains unclear.
The coverage change Oregon still allows individual to enroll in health insurance on your own Oregonians , and is available in 49 states and Washington, DC Recently, agents and assistants certified applications earned the use of a password-protected site for beta enroll people in one sitting . Since last Friday, more than 700 people had registered online.
It is unclear whether the extension of Oracle has been mutually agreed by exchange officials and society. A red flag means that exchange officials reportedly had little or no say in where we were Oracle staff and left. This means that the change had little control over what skills will be maintained, including the skills necessary to complete the unfinished project parties.

Several of the functions considered crucial to the site are not done despite being part of Oracle’s initial promises:

  •  Public enrollment was supposed to allow 10,000 people to self-enroll online at the same time. The site has not been certified for public access.
  •  The interfaces with private insurers have not been finished. That means even if an agent enrolls you and gets a success message, in most cases your information still must be sent to insurers using an old-fashioned spreadsheet, for them to upload. The Patient Protection and Affordable Care Act known as Obamacare envisioned the insurer interface as a crucial part of the enrollment process.
  •  The exchange’s interface with the state Medicaid program to get people enrolled in the Oregon Health Plan is also not done. Instead, a backup system in which Cover Oregon sends information to the Oregon Health Authority for manual entry is in place. The backup system has been riddled with problems and reports of applications gone missing or delayed for months.
  •  The portion of Cover Oregon intended for small businesses and their employees to enroll and qualify for tax credits remains unfinished and on hold indefinitely. Much of the programming is untested and was done early on, before problems with allegedly shoddy Oracle programming were discovered by Cover Oregon.
  •  Interfaces with tribal health plans, much like SHOP, remain unfinished and on hold indefinitely.

Cover this fall Oregon has emerged as a political disaster and business, both Oregon and Oracle. Exchange of Oracle stopped paying in September, after it became clear that he could not deliver the change in functional health promised time. The company had already paid more than $ 90 million.

Other politicians have called for the leaders of Oracle solves the problem with the company money. Critics have criticized to be in touch on the cover of Oregon. He admitted that he was in contact, praising the deployment exchange of good Oregon in a speech at the end of October, three weeks after the failure of the launch site.

The state was forced to pay millions of dollars in additional manual application rather than a functional change, recruitment and transfer of more than 400 state employees and processes for the implementation of temporary work.
Oracle has released more bodies at the problem, including some of its experts in high technology. By December, according to the bills of Oracle, which had about 170 companies working on the project covering Oregon, many of billing more than $ 300 per hour.
The company has repeatedly declined to comment.

Goldberg, director of change, said that if the site cannot offer complete self- registration to the public March 31, the exchange should consider alternatives to proceed with Oracle to complete the site. These options could include hiring a different firm to complete the site, or get systems and from other states or the federal government.

This analysis is conducted by the consulting firm Deloitte Technology Inc., which is expanding its presence in Oregon as contracts covering Oracle.
Deloitte served as a systems integrator, or CEO of several exchanges in the state with more success. Oregon made the fateful decision not to hire a systems integrator to monitor your business, instead of putting the project into the hands of Oracle.The state has hired a law firm in Portland to explore possible litigation against Oracle.



Oracle Patches 144 New Security Vulnerabilities to Start 2014

The New Year starts with a bang Oracle, at least in terms of security updates. In stark contrast to Microsoft, which today published only four security bulletins, Oracle set a staggering 144 new vulnerabilities spread across its range of software as part of its quarterly Critical Patch Update (CPU).

Topping the list of vulnerabilities and the impact of widespread fixed 36 security fixes for Oracle Java. Oracle has started to include security measures as part of the Java version of their main CPU in October 2013. At that time, Oracle has established a total of 127 vulnerabilities in Java that represents 51 of the same.

With the increasing vulnerability of Java January 34 of the 36 defects are remotely exploitable without authentication of the user, then one of the most dangerous types of software defects. Going a step further, Oracle has classified five new vulnerabilities in Java to have the highest possible Common Vulnerability Scoring System (CVSS) score of 10.

Java is one of the pieces more targeted and more suitable software in use today. Several manufacturers, including Hewlett – Packard and Kaspersky Lab, have reported an increase in attacks against Java in 2013. According to Kaspersky , between March and August 2013, there were at least 8.54 million Java exploits attacks. Responsible for the Zero Day Initiative, Hewlett – Packard Safety Research, spoke at length about the exploits of Java during a Black Hat USA 2013. Although Java zero-day exploits are responsible for some of the attacks, most of the attacks are against vulnerabilities that Oracle has patched in a public update, even if users have not updated their systems.

” Unfortunately, being an enterprise Java platform , there are many software vendors that only support older versions ( usable) of Java, ” Tommy Chin , Technical Support at Core Security , told eWEEK . “The companies that own and depend on this type of software are blocked by reordering, because the update will break their existing production Java applications.”

Chin suggests that for those who cannot perform the upgrade, you must check the access control lists are tightly controlled and access to Java applications are facing internal and exposed only through virtual private networks (VPNs).

In addition to Java, Oracle Fusion Middleware Suite is patches for multiple vulnerabilities. Overall, Oracle patched 22 security vulnerabilities in the merger, including 19 remotely exploitable without authentication of the user and a single defect leads to a CVSS score of 10.

The suite of Oracle and Sun Systems products, including the Solaris operating system UNIX, receiving 11 patches, only one of which is remotely exploitable. Oracle breaks now separate corrections for the MySQL database, which came to Oracle through the acquisition of Sun in 2010. MySQL has been scheduled for 18 security vulnerabilities, only one receives the highest CVSS score of 10.
Unlike MySQL, the database with the same name is always just five security patches from Oracle, and only one of the faults is remotely exploitable without authentication of the user.

While Java updates are a priority, so other corrections, Ken Pickering, director of engineering at Core Security, told eWEEK .
” The truth is that many of Oracle’s products are found in many places, holding or standing in front of a lot of critical data. “It’s important to keep these particular applications to date, as many of them are critical to the business.”
Pickering said the fact that Oracle applications are business-critical implementations, in general, it is even more difficult to perform maintenance