December 4th, 2020 | 10:30 CET
Oracle, Facebook, Osino Resources - year-end rally is on!
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Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Oracle - Invest in yourself
The Tech Rally is in full swing! Oracle will report its results next week. In the last quarter, Oracle could only increase its revenues in the low single-digit percentage range. While some of its cloud services are growing rapidly, it may not be able to compensate for weaknesses elsewhere. However, cost containment efforts will drive operating profit growth to a significant degree.
BioNTech, Pfizer, and Moderna's vaccines could enable people to return to work. Stocks like Oracle, which have benefited extraordinarily from the "home office" phenomenon in recent months, could also turn. The attractiveness of Oracle lies in its ability to deliver efficient databases and tools, i.e. to reduce the operating costs of companies significantly, or to increase EBIT. Oracle's operating costs, even at USD 6.2 billion, are a large pool of expenditures that one would now like to address more. In the last quarter, they decreased by 3%, while revenues increased by 12% year-on-year, improving the EBIT margin by a whopping 300 basis points to 34%. The resulting double-digit growth in earnings makes Oracle feel like one of the growth companies.
Oracle has been driving earnings per share by buying back shares, a concession to itself not to look for better return opportunities for shareholders. Alternatively, these surpluses could be distributed. However, as the financial markets are continually rising to record highs, it could become difficult for Oracle to use its cash reserves for financially attractive takeovers. Over the last ten years, Oracle has reduced its freely circulating stock by a full 40% which has made earnings per share look better than it would otherwise have done. The market capitalization is currently valued at USD 178 billion, which results in a price-turnover ratio of 4.5 - which means Oracle is not too expensive compared to other tech stocks.
Facebook - The data octopus is looking for excuses
A group of US states led by New York is investigating Facebook for possible antitrust violations and non-compliant use of customer-related data. Citing sources familiar with the situation, Reuters reported that more than 40 states are behind the suit, which is expected to be filed soon. In Europe, Facebook has recently been subject to several court hearings for undisclosed data use. A few small changes have been implemented in the terms and conditions. The data analysis continues!
Facebook and other technology giants such as Amazon, Apple and Alphabet are accused of using their size and reach to draw consumers to their products and services, thereby stifling competition. Specifically, the antitrust authorities are investigating whether Facebook is exploiting its size and network presence in search and advertising practices - primarily via platforms of former third-party providers such as Instagram and WhatsApp, which are now also owned by Facebook.
The Federal Trade Commission could file a corresponding complaint with a court, Reuters reported. Facebook CEO Mark Zuckerberg, in a statement to Congress, argued that the Company has several competitors, including the other technology giants. He has defended the Company's acquisitions, such as Instagram and WhatsApp, saying the combined platform has helped them evolve from small, unimportant Companies into true "power plants." Investors on the NASDAQ are not interested in litigation; after all, Facebook is one of the most profitable tech stocks in the world. The Company has reached a market value of USD 806 billion, just below its all-time high - we would say "The Trend is your Friend".
Osino Resources - Holiday in the Goldsands
Lufthansa doubles its flight capacity to Namibia. In the turn of the year, some Europeans can't stand it behind the stove and fly into the sun to the old German Southwest Africa known today as Namibia. The water is cold all year round, but great desert experiences, a fantastic animal world and a European influenced culture attract. Currently, Namibia is not a corona risk area - so tourists are welcome!
Osino Resources Corp. has been active in Namibia for several years and owns several properties near the capital Windhoek and just over the border of South Africa in the middle of the Kalahari Desert. Osino announced in the second half of November an update on exploration drilling at the Clouds, Twin Hills West and Barking Dog projects along with the trend of Osino's existing Twin Hills Central ("THC") gold project in north-central Namibia. There the Company owns a vast 6,900 sq km land area. THC is part of the extensive Twin Hills gold system discovered by Osino in 2019.
Significant assay results were obtained in 2019 at Clouds West and East, confirming the discovery of two new zones of high-grade gold mineralization. These new areas indicate the potential to double the potential yield at THC in the future, thereby significantly increasing the possibility of THC's adjacent resources.
With the current gold correction and the upcoming "Tax Loss Season" in Canada, Osino shares could be available again for around CAD 1.20. Majors are already known to take a closer look at the mine-friendly environment in Namibia. A surprising rise may not surprise thus, because some analysts already proclaimed price targets of CAD 3.00.
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