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A Bizarro Market Reaction to Oracle

The following Estimated Earnings and Return Calculator is based on the consensus of 41 analysts reporting to Standard & Poor's Capital IQ that forecast Oracle's five-year earnings growth rate of 11.5% per annum. Based on what I heard in the conference call, I believe these estimates could be conservatively stated. Nevertheless, they imply double-digit returns, including dividends for Oracle shareholders over the intermediate to long-term future.

Summary and Conclusions: Based on fundamentals, I believe Oracle was undervalued prior to its third quarter 2013 conference call on March 20. After what I consider to be a rather "Bizarro" reaction on Wall Street, I feel the stock has moved into a compelling long-term buying range.

I can't believe that such a small miss would create such a hugely negative reaction. In my logical world, I believe buying low in order to sell higher later is the more logical action over the opposite that is currently taking place.

At the time of publication the author was long ORCL.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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