NEW YORK (TheStreet) -- Along with "cloud computing," the term "big data" has become the buzzword of buzzwords on Wall Street. Though there are many who will jump at the chance to offer an opinion on the new craze, there are very few analysts that can describe what the concept really means -- much less appreciate its real potential.
How can Wall Street truly forecast with any degree of accuracy the companies that are positioned to capitalize on this transition?
In that endeavor -- what Wayne Gretzky would describe "skating to where the puck is going" -- Wall Street has steadily focused on a handful of names that include some current titans such as
. These are indeed qualified companies with undeniable expertise in this area. However, analysts continue to discount the value of database giant
, a pioneer that stands to profit not only in cloud technologies, but in analytics - its only competition in the latter coming from
Overlooked amid Wall Street's new infatuation with cloud infrastructure companies is exactly how will the collection of data be used? This is what Oracle understands better than any other company.
On this basis I expect Oracle to emerge as a force within the cloud sector, eventually dominating for years to come. Even more impressive is the fact that it will accomplish this without having to change or alter what it already does well.
Businesses will always want to grow and in search of that growth they will need tools for better and quicker decision-making -- also known as
. Given the rate at which companies are accumulating "big data" and positioning their models for cloud efficiency, it seems reasonable to project strong ongoing demand for companies such as Oracle that offer exceptional analytical solutions. Oracle also avoids vulnerabilities within the cyclical nature of enterprise spending -- an important factor allowing more consistent stock projections.
While Wall Street is quick to apply exceptional growth multiples to equipment and data storage names like
, EMC and Juniper, those same investors seem to think that Oracle is not expected to grow at all. How is it possible the hardware companies can experience such robust growth without expecting the software vendors to trend at least commensurately? It's like expecting PC companies to soar while
languishes -- it doesn't make a whole lot of sense.
Oracle has built its brand and reputation by providing software that manipulates data to arrive at answers that nobody can provide -- hence its name. So a current P/E of 14 while both F5 and Juniper enjoys multiples that are more than twice that is a bit perplexing. Even more egregious is the fact that a name such as
sports a multiple three times higher -- even after recently
that missed on both the top and bottom lines.
Without question Wall Street continues to get this story wrong and it is time that investors wake up to the erroneously high P/Es given to cloud infrastructure names while ignoring an under-appreciated component of "big data" in analytics. What should be understood is that while everyone wants to focus solely on the collection of data, the real value will come it analyzing exactly what to do with the information and how companies can execute decision-making to advance their corporate and enterprise missions.
Not only is Oracle the best company to realize this growth market, from a fundamental standpoint, its strong cash position, deep market penetration, and innovative strategies have positioned its stock as one of the bright spots in today's recovering market.
With a P/E of 14 suggesting a gross lack of respect for this tech giant, value investors who are thirsty for growth and a decent yield should give Oracle a long look. At current levels as it has become the cheapest cloud name on the market.
At the time of publication, the author held no positions in any of the stocks mentioned.