Oracle (ORCL)

World leader in relational database software

Extremely diversified customer base

Strong oversees presence and growth

The development of the fusion application suite reflects latest technology standard. This technology is going to provide a usability and flexibility advantage to customers.

The permanent weakness of the USD against the EUR (current strength is not sustainable in view of the interest rate conditions and trade inbalance) is providing an advantage against competing SAP in Germany.

A survey conducted by Citigroup amongst major institutional investors provided the following insight on todays markets:

The favored sector is Tech and this sector has held the top position over the last 12 months. Growth stocks are also a hot item of late, the market sees the economy in a more positive view for the second half of the year and this should bode well for growth stocks. An additional upside of 6% is expected from current market levels to the end of the year. The majority of this optimism is due to the market rally since March, investors believe the market has bottomed. Regardless of the expected drop (approximately 20%) in earnings this year, a common consensus is the rebound in 2010 will be in the double digits. I’m certain Oracle had this information in mind prior to its acquisition.

Oracle Corp. (ORCL) pounced on the opportunity to buy Sun Microsystems Inc. (JAVA), for about $7.4 billion in cash, stepping in after Sun’s talks with International Business Machines Corp. (IBM) fell apart.

The deal gives Oracle control of server and software maker Sun’s coveted Java programming language and brings to a close Sun’s 27-year reign as the maverick of Silicon Valley. Java is the dominant language of the Internet and runs on over 1 billion devices worldwide.

The acquisition is in line with Oracle’s overall business strategy. Oracle, the world’s second-biggest software maker, has dropped $34.5 billion on buyouts since 2005, making it the most aggressive software company in the hi-tech field.

"The deal would strengthen Oracle’s position against IBM. Oracle has done a good job on acquisitions it has done earlier," Robert Jakobsen, analyst at Jyske Bank in Copenhagen, told Reuters. "It makes sense also historically. Oracle has been more successful commercializing software than Sun."

Oracle said it will pay $9.50 a share for Sun - a 42% premium to Sun’s April 17 closing price. Sun had previously rejected IBM’s offer of $9.40 a share, according to sources cited by Reuters.

The acquisition, scheduled to close this summer, will add about $1.5 billion to Oracle’s operating profit, excluding some items, in the first full year after closing, Oracle President Safra Catz said.

The merger cements the relationship between the two companies, who have been partners with each other for more than 20 years. Oracle’s Fusion Middleware, its fastest-growing business, is built on Java. Sun’s Solaris software platform is also the operating system for Oracle’s database business.

Solaris competes against Linux and Microsoft Corp.’s (MSFT) Windows software. Software sales at Sun accelerated by 21% last quarter and the company projects revenue from those products will reach about $600 million a year. By comparison, software sales at Oracle totaled $17.8 billion in its latest fiscal year. The takeover also gives Oracle entry into the server-computer market, pitting it against IBM in the market for selling products for data centers that run networks and corporate web sites.

During the last 5 years shareholders equity tripled and revenue/ profits doubled. The share price went up less than 30% during this time. For this reason the stock is undervalued in comparison with the past.

With millions of Java programmers and thousands of mission-critical application systems based on Java technology, Oracle now has a stronger foothold across the global corporate information technology grid.