Odds ‘n Ends – Conservative Portfolio (Part 2)
- Oracle‘s fifth-generation flagship database machine, Exadata Database Machine X4, will introduce new hardware and software to accelerate performance, increase capacity and improve efficiency and quality of service for database deployments. The new release focuses on Online Transaction Processing, database consolidation and data warehousing and is also designed to help clients simplify their biggest database challenges. It includes performance increases between 50% and 100% and storage capacity increases between 33% and 100%. I am looking at hardware and cloud computing to drive ORCL from this point forward, as client-based software sales and support will remain soft.
- Schlumberger expects the temporary shutdown of its operations in southern Iraq last month in a “security incident” to reduce fourth-quarter profits by about 2%. The company expects spending growth from energy companies in 2014, particularly in the Gulf of Mexico, sub-Saharan Africa, Russia, the Middle East and China. But Schlumberger anticipates a flattening of spending on seismic underground mapping work, and said negative pricing in North America continued across most product lines. Shares of SLB have fallen about 7% since inclusion into the list last month along with most other oil service providers, but longer-term I believe there is potential for decent price appreciation.
- Shares of diversified manufacturer 3M Co. have taken a bit of a breather and some analysts are becoming less sanguine on MMM’s revenue and earnings growth prospects. The shares are up 36% over the past twelve months, and are admittedly fully valued, but longer-term this equity, which should earn $6.72 this year and somewhere between $7.35-$7.40 in 2014, can continue to be held in a well diversified conservative portfolio.
- United Parcel Service is ramping up for its 107th holiday season. On December 16, UPS anticipates an increase in pickup volume totaling 34 million packages. Year-over-year this marks an 8% increase and is twice the average daily shipping volume of 16 million. On Cyber Monday, December 2 – pick-up volume was approximately 32 million, an increase of 10 per cent. My favorite “Internet” play, UPS has the potential to earn $4.76 this year and $5.48 is the general consensus for next. Along with a 2.5% yield, the shares have above average, albeit conservative, long-term total return potential.
Next week I will explore the income portfolio choices.