Jefferies Has 3 Compelling Value Stocks With Solid Upside Potential

Investing

Published: March 22, 2016 8:35 am

Last Updated: January 13, 2020 11:40 am

Often the top firms we cover at 24/7 Wall St. are positive on a stock and may have it rated at Buy, but when something positive like earnings or other catalysts start to factor in, the analysts may become even more positive and believe a rerating may be in order. That generally applies to the question of what the market’s current valuation should be, in light of new-found data or direction.

In a new report, the analysts at Jefferies feature three compelling value stocks that they feel may be in for a rerating or a new valuation, due to earnings and outside events. All three stocks are rated Buy at Jefferies.

Oracle

This top software stock has traded sideways since last summer and looks to be breaking out. Oracle Corp. (NYSE: ORCL) develops, manufactures, markets, sells, hosts and supports database and middleware software, application software, cloud infrastructure, hardware systems and related services worldwide. It licenses its Oracle Database software to customers, which is designed to enable reliable and secure storage, retrieval and manipulation of various forms of data. Its Oracle Fusion Middleware software aims to build, deploy, secure, access and integrate business applications, as well as automate their business processes.

With shares trading at 15.83 times estimated 2016 earnings, and with a solid free cash flow yield, many analysts also feel that Oracle’s 12C database cycle starts to contribute during calendar 2016, and the stock could very well be poised for what they term a breakout year. After recent investors meetings, some analysts raised fiscal year 2017 cloud margins to 66% from 63% and earnings per share to $2.80. Some also believe that the software giant may be on the verge of a multiyear database product cycle.