Today’s Stock of the Week is a giant in the tech industry that trades like a value stock. And with the company’s recent moves into cloud computing, now might be a good time to invest.

Clear in the Cloud

Oracle Corporation (ORCL) develops, manufactures, hosts and supports a wide variety of major software services worldwide, especially in three areas focused on the rapidly expanding realm of cloud computing.

It licenses Oracle Database software for storage, retrieval and manipulation of massive amounts of data…Oracle Fusion Middleware for integrating business applications and automating processes…and a variety of software for mobile computing. Consumers may know it best for its Java software development language, which is widely used on the Web and in mobile apps.

Like other huge onetime hardware-based companies, Oracle is migrating much of its business to the cloud, and investor skepticism about its success has held back the shares—Oracle trades like a value stock. But it has significant long-term growth potential. It generates $12 billion in free cash per year and pays out less than one-third of that for its dividend of $0.60/share/yr., which recently yielded 1.54% and could rise.

Oracle has very low customer turnover and an astute management team that is doing a good job of making strategic acquisitions. One of those—a $9.3 billion deal for Netsuite, a company specializing in cloud-based business-management software—may or may not go through, but if it does not, management will use its cash and strong balance sheet to fund other solid acquisitions. Revenue of $37.05 billion in fiscal 2016 should grow to $37.61 billion in fiscal 2017 and $38.6 billion in fiscal 2018.

Earnings per share: 2018 est./$2.88… 2017 est./$2.63… 2016/$2.07. (Fiscal year ends May 31.)

This Week’s Expert

roge_steven_m-4cSteven M. Rogé is portfolio manager at R.W. Rogé & Company, Beverly, Massachusetts, which manages $227 million. RWRoge.com