The mean target price of $42 implies the required return for this stock of about 15%, EPS around $.59 and $.77 in 2002 and 2003 respectively and long term growth rate of 25%. CAPM sugguests rate of return of 20%.
Upward trend has been established and currently the stock has started to move away from overbought. $38 is its resistant point and $27 is its support point for short term.
I shall consider to buy at a price below $30 and sell at above $37.
Oracle, J.D. Edwards, ICT Group (ICTG)
The Company is leader in CRM with strong partnership with consulting firm like Accenture and other big 5 CPA firms (or their spin off consulting business) and leading technology vendors like IBM, Microsoft, Sun and compaq.
It has strong customer base. Big customers include AT&T Corporation, BankBoston Robertson Stephens, Bank of America Corporation, Cabletron Systems, Inc., The Charles Schwab Corporation, Cisco Systems, Inc., Compaq Computer Corporation, Dell Computer Corporation, Documentum, Inc., IBM Corporation, Lucent Technologies, Inc., MCI WorldCom Inc., Microsoft Corporation, PeopleSoft, Inc., Rational Software Corp., RSA Security, Inc., Quest Software, Inc., Siemens Corporation and Sun Microsystems, Inc.
It has a healthy balance sheet. It sits on about $1.6 billion of cash and short term investments and has only $ 300 million debt.
Increasing demand for adequate return on investment and continuous reduction of spending in IT will limit the growth of its business in short term.
Oracle has started to enter the market of CRM and other B2B applications.
SAP announced it had opened its Web services architecture with support for open technical and business standards by integrating third-party infrastructure technologies, including Microsoft .NET and IBM WebSphere. With WebSphere, IBM is attempting to serve business-to-employee (B2E), business-to-business (B2B) and business-to-consumer (B2C) through one single portal access point.
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