Oracle’s Earnings Fallout Offers Hidden Contrarian Opportunity
Enterprise-software stalwart Oracle Corp (NYSE:ORCL) suffered significant volatility during Monday’s after-hours session following the release of disappointing financial results.
For its fiscal second quarter, the company posted adjusted earnings per share of $1.47, missing Wall Street’s consensus view of $1.48. Further, on the top line, sales of $14.06 billion fell short of the anticipated $14.11 billion.
What made the matter worse was that just ahead of the disclosure, ORCL stock printed what appeared to be a strong bullish wave. Specifically, Oracle shares were above their five, 20- and 50-day exponential moving averages.
To be fair, circumstances don’t appear auspicious. However, it’s also important to realize just how rare deeply negative sessions are for Oracle stock. In the trailing five years, there have been 1,238 trading sessions. Of this vast number, only 15 sessions saw a day-to-day loss of greater than 5%.
Of course, no one wants to incur deep red ink. Nevertheless, unless compelling evidence exists to suggest that a secular downturn is on the horizon, a bullish posture remains the more reasonable approach.
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Holding Firm to Empirical Data
While a strong temptation exists to read between the lines of Oracle’s rough Q2 earnings report, it may be better to …
Full story available on Benzinga.com
