Before I show my screens for three software companies that are worthy of adding to the shelves in the software section of the Tech Stock Five & Dime, I will profile the stocks of Oracle (ORCL) and Tibco (TIBX) , following the companies' quarterly earnings reports on Thursday evening.
Oracle reported quarterly earnings after the close on Thursday, matching consensus estimates helped by the acquisition of PeopleSoft. However, the stock is lower on reporting slowing sales of its core database software. Oracle operates in a tough environment, and this morning my model shows shares 27.3% undervalued with a negative weekly chart profile. Below the five-week modified moving average at $13.23 is risk to the 200-week simple moving average at $12.09. A close below my quarterly pivot at $12.94 would enhance this downside risk profile.
Tibco Software is a business integration software company that reported EPS slightly better than consensus, as the company showed improvements over the past few quarters in several areas of its businesses. Tibco's business strategy is building a platform for software applications integration for the clients' information technology infrastructures. The stock is 26.5% undervalued with a positive weekly chart profile. Holding the five-week modified moving average and the 200-week simple moving average at $7.70/$7.55 indicates shares have potential strength to my quarterly risky level at $10.68. Keep in mind, if Tibco gets back up above $10 it will qualify for portfolios of more equity money managers.
Nickel and Diming for Dollars
Today I will add
( WEBM) to the software shelves of the Tech Stock Five & Dime:
To qualify to be in the software aisles of the Tech Five & Dime, a stock must be at least 30% undervalued, according to my model. Then I look at the stock's weekly chart profile to make sure that none were overly negative. For those with a negative technical profile, I advise buying on weakness to the value level I included for each stock on the shelf. Keep in mind that all stocks profiled are extremely risky and thus investments are speculative. Today's adds are at least 40% undervalued.
provides application infrastructure software that automates information along customers' supply chain. BEA Systems is 59.8% undervalued with a negative weekly chart profile, and its five-week modified moving average stands at $8.85. The correction is testing my monthly value level at $8.35, where long-term investors should consider starting a position. Be prepared to dollar-cost average at a lower value level that will be determined by the stock price at the close on Sept. 30. I will follow up with that level early next month.
, a business consulting and technology services company, helps clients design, implement and manage information technology solutions. Sapient is 51.8% undervalued with a negative weekly chart profile. Below the five-week modified moving average at $7.07 there is risk to the 200-week simple moving average at $4.93. In early October I will provide new monthly and quarterly value levels.
stock is 44.6% undervalued with an overbought weekly chart profile. The company provides software and services for business integration applications. A close next week below its five-week modified moving average at $6.51 indicates risk to my quarterly value level at $5.81, where long-term investors should consider buying.
Richard Suttmeier is president of Global Market Consultants, Ltd., chief market strategist for Joseph Stevens & Co., a full service brokerage firm located in Lower Manhattan, and the author of
newsletter. At the time of publication, he had no positions in any of the securities mentioned in this column, but holdings can change at any time. Early in his career, Suttmeier became the first U.S. Treasury Bond Trader at Bache. He later began the government bond division at L. F. Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the technicals of the U.S. capital markets. He also has been U.S. Treasury Strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor's degree from the Georgia Institute of Technology and a master's degree from Polytechnic University. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback --
to send him an email.