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Labor Market Continues to Show a Positive Trend and Oracle Misses on Top and Bottom Line

U.S. markets will look to reach record territory again following yesterday's small rebound and jobless claims numbers which continue to show an improving labor market. Jobless claims, which track the number of The number of Americans filing for jobless benefits dropped to the lowest point in five years as jobless claims slightly rose to 336,000. Economists polled by Thomson Reuters were expecting jobless claims to come in at 342,000.The four-week moving average now stands at 339,750, the lowest average since February 2008.

Earnings

Shares of software giant Oracle (ORCL) are under pressure after it reported third quarter EPS of $0.065 versus analyst estimates of $0.66. Revenue also fell short of analyst expectations as it was hurt by a decline in software sales and subscriptions. The company is also forecasting more woes in its hardware business. Apparently its large and growing sales force isn’t performing like it used to.

"What we really saw was the lack of urgency we sometimes see in the sales force, as Q3 deals fall into Q4," Chief Financial Officer Safra Catz told analysts on a conference call. (Reuters)

"Since we've been adding literally thousands of new sales reps around the world, the problem was largely sales execution, especially with the new reps as they ran out of runway in Q3." (Reuters)

Shares of Oracle were down more than 5% in early trading. Gurus who increased or established a new position in the software giant include:

Special Situations

In other news that might have an impact on Oracle, the Blackstone Group (BX) has asked Oracle executive and former Hewlett-Packard (HPQ) CEO Mark Hurd if he wants to run Dell (DELL). Rumors are floating around that Blackstone is contemplating an offer for Dell (DELL). Dell’s “go shop” deadline is tomorrow in which interested parties can make an offer which is higher than the current $24.4 billion offer by company founder Michael Dell and private equity firm Silver Lake Partners for the world’s No. 3 PC maker.

If Dell is to receive a higher offer by the deadline, the Gurus who stand to benefit include:

Finally, shares of retailer J.C. Penney (JCP) are down slightly after the company said its turnaround could take longer than initially expected and any change in the current strategy could be expensive.

"Any changes to our strategies could be substantial, and if implemented, could result in significant additional costs," the company wrote in the report filed with the Securities and Exchange Commission.

The major Gurus holding shares of the struggling retailer include:

  • Bill Ackman’s Pershing Square which owns 39 million shares

  • Dodge & Cox which owns 20.225 million shares

  • Hotchkis & Wiley which owns 13.877 million shares
Bil Ackman is the one Guru to watch.

About the author:

earningsyield
I'm in love with value investing and in particular Joel Greenblatt's "magic formula". I run a well diversified portfolio

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