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Cabot Benjamin Graham Value Investor Special Bulletin

Oracle (ORCL) has reached its Minimum Sell Price and should be sold. Kroger (KR) is expected to flounder in the 21.5 to 23 area for an extended period of time so it’s a Sell too.

Sell Oracle (ORCL) and Kroger (KR)

Oracle Corp. (ORCL 50.50) reached its Minimum Sell Price of 48.62 today, June 22. The company recorded solid sales and earnings for the quarter ended May 31. Sales advanced 3%, EPS climbed 10% and cloud revenue surged 64%. ORCL’s stock price surged 10% this morning and is now overvalued.

Oracle was first recommended in April 2006 at 13.73. The company was featured in the Cabot Value Model using the Modern Value analysis. ORCL has climbed 275.89% in the past 134 months compared to a gain of 88.14 % for the Standard & Poor’s 500 Index during the same time period. I recommend selling your ORCL shares now.

Kroger Co. (KR 22.30) reported weak sales and earnings which sent the shares down 18% after the report on June 15. The drop was problematic and then Amazon announced its intention to purchase Whole Foods, which sent KR’s stock price down another 11%.

Today, Kroger increased its quarterly dividend to $0.125 from $0.120, and announced a $1 billion stock repurchase program. Management provided an upbeat assessment of the company’s future prospects, but KR’s stock price is down slightly today in reaction. I expect KR shares to flounder in the 21.5 to 23 area for an extended period of time. Therefore, I recommend selling your KR shares now.

J. Royden Ward has spent his entire career seeking strong investment returns for his clients while keeping risk low. In 1969, he developed a computerized model of stock selection based on formulas created by investment legend—and Warren Buffett mentor—Benjamin Graham, and since 2003, he’s been spreading his wisdom far and wide as chief analyst of Cabot Benjamin Graham Value Investor.