NEW YORK (TheStreet) -- I was recently reminded by some comments from readers that I've been on a pretty good winning streak lately.
Some of my recent calls includes Pep Boys' (PBY) stock selloff, my buy recommendations of Adobe (ADBE) and Micron (MU) and the ongoing struggles of VeriFone (PAY) that we've documented for the past nine months.
So why do I feel like a loser?
Well, we always remember the one that got away. In this case, I missed on Oracle (ORCL).
I wouldn't compare the company to the San Antonio Spurs losing game 6 of the NBA championship to the Miami Heat, but watching shares of Oracle plummet 9% Friday makes me realize that I'm not as smart as I think I am.
Readers, I'm sorry for letting you down. Let's figure out where I went wrong.
I'm not going to deny that I've long had a love affair with Oracle, even though I don't currently own the stock. This "infatuation" with the database giant has allowed me to give the company a sort of "benefit of the doubt" for things that I normally would punish other companies for. I won't apologize for this -- Oracle has earned this level of respect.
Nevertheless, it was wrong for me to make excuses for the company's disappointing third-quarter (March) earnings report, which led to my recent buy recommendation. Management attributed the miss to poor sales execution, including the fact that the company had hired new salespeople who simply couldn't close deals. I don't doubt that this reasoning was true, especially since Oracle's third-quarter is historically the company's weakest.
However, after another revenue disappointment in this fourth quarter, which includes lower-than-expected growth in the software segment, I'm inclined to believe there are other underlying fundamental issues that are impacting upon the company's performance.
Less than 1% growth in new software licenses and cloud software subscription, which missed the lower end of management's guidance suggest that Salesforce.com (CRM)
is doing some serious damage. For that matter, I'm also inclined to believe that given the lengths that Salesforce.com is willing to go
, Oracle's struggles may only be starting.
Plus, given the fact that management issued lower-than-expected guidance for the next quarter, it's clear that Oracle is sensing the imminent pressure not only from Salesforce.com and IBM (IBM)
but possibly from emerging cloud rivals like Workday (WDAY)
. What's also clear here is that enterprises are beginning to shift how they procure services that meet their strategic initiatives. Is Oracle falling behind? It sure seems that way.