SAN FRANCISCO, CA - OCTOBER 22: Oracle co-founder and Chairman Larry Ellison delivers a keynote address during the Oracle OpenWorld on October 22, 2018 in San Francisco, California. The Oracle co-founder and Chairman kicked off the annual Oracle OpenWorld conference that runs through October 25th. (Photo by Justin Sullivan/Getty Images)Getty ImagesOracle (ORCL) stock could be a strong contender to capitalize on the current momentum. Why? Because it possesses strong margins, a low-debt capital structure, and ...

Core Viewpoint - Oracle (ORCL) stock is positioned as a strong investment opportunity due to its robust margins, low-debt capital structure, fair valuation, and positive momentum [2] Financial Performance - Oracle experienced a revenue growth of 9.7% over the last twelve months (LTM) and an average growth of 10.2% over the past three years [7] - The company has an operating cash flow margin of approximately 35.6% and an average operating margin of 30.3% over the last three years [7] Market Position - Oracle is currently in the top 10 percentile of stocks based on "trend strength," indicating strong momentum [7] - Despite its positive momentum, ORCL stock is trading 13% lower than its 52-week peak, suggesting potential for further growth [7] Investment Strategy - The selection strategy for stocks includes criteria such as a market capitalization greater than $2 billion, high operating and cash flow margins, no significant revenue declines in the past five years, reasonable valuation, low-debt capital structure, and strong momentum [6] Performance Metrics - The average 12-month forward returns for selected stocks are nearly 15%, with a win rate of approximately 60% for selections returning positive [8]

Core Insights - A consortium led by Oracle, Silver Lake, and Andreessen Horowitz plans to acquire 80% of TikTok's US operations to prevent a ban in the US [2][3] - Oracle's stock has increased by 21% over the past month, supported by a strong five-year forecast and a 359% year-over-year rise in remaining performance obligations (RPO) to $455 billion [2][10] - The current market capitalization of Oracle is $852 billion, with a diverse range of offerings including cloud software applications and enterprise databases [5][10] Valuation - Oracle's stock valuation appears very high, raising questions about its attractiveness at the current price level around $300 [4][6] - The company has demonstrated strong operating performance and financial health, but its current valuation may be considered expensive [4][10] Growth - Oracle has experienced an average top-line growth rate of 10.2% over the past three years, with revenues increasing from $54 billion to $59 billion over the last 12 months [10] - Quarterly revenues rose by 12.2% to $15 billion in the most recent quarter compared to $13 billion a year prior [10] Profitability - Oracle's operating income over the last 12 months was $19 billion, resulting in an operating margin of 31.6% [10] - The company generated approximately $12 billion in net income, indicating a net margin of about 21.1% [10] Financial Stability - Oracle had $105 billion in debt at the end of the last quarter, leading to a Debt-to-Equity Ratio of 12.3% [10] - The company's cash (including cash equivalents) constitutes $11 billion of $180 billion in total assets, resulting in a Cash-to-Assets Ratio of 6.1% [10] Resilience - Oracle has shown greater resilience than the S&P 500 index during various economic downturns, recovering quickly from declines [8][11]