Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Oracle ( ORCL)

Company Profile: Oracle develops, manufactures, markets, distributes and services database and middleware software as well as applications software designed to help its customers manage and grow their business operations.

1-Year Total Return: +44%

Schoenstein's Take: Much like Microsoft, Oracle is a play on the IT space for the Jensen Portfolio. Oracle has a portfolio weighting of 4.2% and, like Microsoft, is attractive on the idea that there is pent up business spending that hasn't taken place, Schoenstein says.

"Oracle is a business where there is a high switching cost," he says. "Once you've made the commitment to go to an enterprise system that is Oracle-based, it's very difficult to then take that system out and replace it with a competitive product. You're then in a recurring or renewal cycle. Oracle gets the initial software license and then a recurring revenue stream that is a benefit."

Oracle's move towards offering customers an all-in-one solution makes the investment more attractive. With the acquisition of Sun Microsystems, Oracle has begun to expand from software into hardware.

"Combine that all together and it's the idea of a solution in a box," Schoenstein says. "It's the all-in-one solution, everything from the hardware to run the applications to the applications themselves to then the upgrades you get from the recurrence of those applications. You have the whole platform available to your customers. When you have that much entrenchment, that installment and recurring revenue stream, that will be very difficult to take out. They just want Oracle to be the application of choice. That's a pretty attractive proposition."

-- Written by Robert Holmes in Boston.

>To contact the writer of this article, click here: Robert Holmes.

>To follow Robert Holmes on Twitter, go to

>To submit a news tip, send an email to:

Readers Also Like:

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

Four Large Cap Growth Stocks for a Slow Economy

Max Out on Ecolab, MasterCard and TJX Shares Says Jensen Manager

4 Stocks That Jensen Quality Growth Fund's Manager Likes for 2016

Buy Becton Dickinson, UTX and P&G Says Jensen Quality Growth Manager

Becton Dickinson, Microsoft Are Quality Buys Says Jensen Manager