This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

NetApp Is a Perfect Takeover Candidate

NEW YORK ( TheStreet) -- With borrowing costs at all-time lows, and the demand to create and store all kinds of data increasing, now would be a great time for an acquisition in the technology sub-sector often referred to as "data solutions providers."

When you think of data-management and storage-solutions providers for gigantic databases like the federal government or the largest growing corporate titans, there are only a few names that come to mind.

Although technology stocks are not getting much respect these days (up to this Monday, only Apple (AAPL) seemed to be a must-own tech stock), there are numerous companies that are still very profitable and priced for buying.

Chris Hyzy, who co-manages $334 billion in assets at U.S. Trust, said in a CNBC interview on Sunday, there are pockets of real growth in the technology sector, citing themes in the cloud computing area, mobile payments areas, software and cyber security (which is why I recently presented an article titled "Upside Potential with Cyber Security Stocks").

In the same CNBC interview, it was mentioned that Oracle (ORCL) is one large-cap tech some strategists suggest considering. Art Hogan of Lazard Capital Markets, said the software giant sits in the sweet spot of middleware and software. "The shares are also cheap", Hogan pointed out.

"When you back out the amount of cash they have on the balance sheet, you are looking at a multiple of only nine times," Hogan said. "Obviously a reasonable multiple when the S&P is trading at 14 times."

ORCL has $30.68 billion in total cash as of its last quarterly report and levered free cash flow (trailing 12 months) of close to $12 billion. It has been predatory when it comes to growing by acquisitions in areas that it can integrate in its profit-making business model.

Having recently heard a report on a National Public Radio that founder Larry Ellison purchased the Hawaiian island of Lanai for around $500 million, I wondered if it's about time for ORCL to expand its already vast array of products and services? Perhaps a foray into the data-storage business would empower it to create even more cash flow and earnings per share.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
NTAP $33.14 0.00%
AAPL $132.54 0.00%
FB $80.54 0.00%
GOOG $540.11 0.00%
TSLA $247.73 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs