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Friday, October 19, 2012

Adobe and Oracle

Tech month is finally here!! To start off this great series of companies, we are showcasing two large players in the software business - Adobe (ADBE) and Oracle (ORCL). Adobe is a software company that focuses on programming (we all know Adobe Reader and Flash) that was established in 1983. The current CEO is Shantanu Narayen. As we began observing the company, just a superficial overview since the late '80s, we noticed that it is very unsteady but that it does have a decelerating growth pattern, growth nevertheless. Instability has increased since 2009, and the shares are stuck around $30. Looking at late September and early October, we saw the same instability, but were hopeful for growth. On September 18th, Adobe bore far ahead of earnings, which consequently led to a influx in trading. Shares kept changing hands quickly until the 21th, when it was announced programming companies were falling below par (including Oracle), and the stock price fell a dollar by the beginning of the next week. Last week, however, ADBE began showing growth again and we invested. Buying shares on Monday at $32.26, we sold them on Friday at $33.24, making $10 on just ten shares! We highly suggest investment in Adobe over the short term, as we expect strong growth for a few days.
Next, we looked at a similar software company, Oracle. This company, established in 2005, focuses on IT servers, cloud computing, as well as programming. Oracle owns Java, the computer language used in nearly every electronic device, which was written in 1994. The current CEO is Lawrence Ellison. Unlike Adobe, Oracle shows consistent growth - except 1999-2000, which we will explain over the coming weeks. Since 2011, unfortunately, ORCL has grown unstable. The last month's market for this company has absolutely no clear pattern. Starting on September 20th, Oracle endured a 2% drop in sales and by next week had already dropped two points. Our biggest concern in the company exists in the uncertainty of its future. Some investors and analysis are saying buy, others telling to sell, some just to remain neutral. Other analysts are interchanging between OP (outperform) and P (perform). We advise against investing in Oracle, as shares are not changing hands enough and we cannot be sure of the equities' future. As proof, we invested in the company and bought shares at $31.20 and they are now at $30.48. These could surge right back up very soon, but we really can't predict anything with Oracle. These are significant players in the tech world - I installed updates for both today - and we certainly hope they will keep climbing (Adobe) or pick back up (Oracle).

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