Measured Approach

ORACLE CORPORATION (NASDAQ:ORCL)

Data as of

: 12/25/2009

Industry: Software and Programming

Current Data

Current Price $24.95 PEG 1.3Market Cap ($M) $125,029.9 EPS TTM ($) $1.15Shares Outstanding (M) 5,010.0 P/E TTM 21.7XInstitutional Holdings % 59.9% EPS Estimated 2010 ($) $1.58Insider Holdings % 23.5% P/Estimated EPS 15.8XBeta 0.93

MA Value ($) $37.79

Latest Quarter Reported 11/30/2009 Dividend Yield % 0.8%

As the economic rebound further develops, the technology sector will play a leadingrole. Oracle Corporation,a bellwether in the tech sector will be a prominent leader. We believe there are a number of value drivers for the coming year:

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The acquisition of Sun Microsystems

will be completed. This will expand Oracle’s

product line to include not only hardware that is optimized to run Oracle

databases but also Sun’s open source software pro

ducts.

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Oracle continues to introduce new product such as the recently announcedCommunications Marketing and Advertising product.

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Analysts are placing too much emphasis on 3Q10 revenue and currencyadjustments. Given economic constraints and currency fluctuations, short termresults are inconsequential.

Summary

We believe Oracle is currently mispriced. We believe the company is trading at adiscount to its intrinsic value of $37.79.

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The P/E TTM of 21.7 is in line with the company’s seven year average P/E

of 21.8X and below the industry median of 23.2X

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Though sales are down about 1.3% for the TTM as compared to FY09, sales for3Q10 are up about 4.5% over 3Q08.

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Gross margin, at 81.1% are higher than those in any year since FY05. Similarly,both operating and net margins are currently higher than in previous years.

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Oracle’s financial condition is strong with a current ratio of 3.0X, interest

coverage at 13X and long-term debt to equity at a manageable 49.9%.

Recent Developments

Thomson Reuters reports the following recent developments:

Oracle Corporation Issues Q3 2010 Outlook In Line With Analysts' Estimates-Conference Call

Thursday, 17 Dec 2009 05:00pm EST

Oracle Corporation announced that for third quarter of 2010, it expects total revenue growth on anon-GAAP basis to range from 3%-6% at current exchange rates and negative 3% to flat inconstant currency. On a GAAP basis it expects total revenue from 4%-7% at current exchangerates and negative 2% to positive 1% in constant currency. Non-GAAP earnings per share (EPS)is expected to be $0.36-$0.38, assuming current exchange rates and from $0.33-$0.35 inconstant currency. GAAP EPS for the third quarter of 2010 is expected to be $0.26-$0.28 usingcurrent exchange rates and $0.23-$0.25 assuming constant currency. The Company reportedrevenues of $5.504 billion in third quarter of 2009. According to Reuters Estimates, analysts wereexpecting the Company to report revenues of $5.775 billion and non-GAAP EPS of $0.37 for thesame period.

Oracle Corporation Declares Cash Dividend

Thursday, 17 Dec 2009 04:02pm EST

Oracle Corporation announced that the Company's Board of Directors declared a cash dividendof $0.05 per share of outstanding common stock to be paid to stockholders of record as of theclose of business on January 19, 2010, with a payment date of February 9, 2010.

EU Warms To Oracle Corporation's $7 Billion Purchase Of Sun Microsystems,Inc.-DJ

Monday, 14 Dec 2009 01:21pm EST

Dow Jones reported that EU regulators signalled they could clear Oracle Corporation's $7 billiontakeover of Sun Microsystems, Inc. after the U.S. software company promised measures to easecompetition concerns. The European Union's executive European Commission said it wasoptimistic a satisfactory outcome was possible. It had previously objected to the deal, citingpossible competition constraints on Sun's MySQL database after the takeover

Oracle Corporation Launches Oracle Communications Marketing andAdvertising

Monday, 7 Dec 2009 05:00 am EST

Oracle Corporation announced the general availability of Oracle Communications Marketing andAdvertising, a new application that enables network operators to securely execute targetedmobile advertising and marketing campaigns.

Financial Analysis

An essential step in the valuation of any company is an analysis of its financial

performance over time. Analyzing a company’s financial statements provides an

indication of historical growth, liquidity, leverage, and profitability, all of which influence

the value of a company’s equity.

The following sections of this report examine the trendof

Oracle Corporation’s

balance sheets, income statements, and financial ratios over

the past five years. In addition, the Company’s financial performance is compared to the

median company in the Software and Programming industry as a means of measuring

the Company’s relative historical performance

Balance Sheets

Presented below are the balance sheets for

Oracle Corporation

for the twelve monthperiod ending November 30, 2009 and for the fiscal years ending May 31, 2005 through2009.

As of November 30, 2009, Oracle’s assets totaled $53,833 million, up 13.5% from the

end of FY09. Current assets totaled $25,235 million, or 46.9 percent of total assets, andconsisted primarily of cash (27.7 percent of total assets). Since the end of FY09, the cashbalance of the company increased from $8,995.0 million to $14,919.0 million or 66percent as of November 2009.

A significant portion of Oracle’s assets are categorized as Good

will/Intangibles. As of 3Q10, Goodwill/Intangibles accounted for 47.7 percent of total assets.Current liabilities were $8,534.0 million as of November 30, 2009, or 15.9 percent of total assets. Short-term debt and Other Current Liabilities were the largest currentliabilities of the company accounting for 1.9 percent and 13.5 percent of total liabilities.Oracle is modestly leveraged, with $13,751.0 million of long-term debt at the end of Oracle is modestly leveraged, with $13,751.0 million of long-term debt at the end

ofQ09, or approximately 25.5 percent of total liabilities and equity. Oracle’s long

-termdebt increased in the past five years from $159.0 million at the end of FY05 to $13,751million in 3Q10.Due to consistent profitability, shareholders

’ equity increased in each of the past fiveyears and for the twelve month period ending November 2009. Shareholders’ equity has

grown from $10,837 million at year end 2005 to $27,531.0 on November 30, 2009.