Company involved in a proxy fight which was fought to a draw last week. Underlying fundamentals are decent. No debt, 4% dividend yield, OK P/E. See http://www.gurufocus.com/financials/QSII. Total share count is a worry (especially if they try to dilute the Ahmed guy) but so far, EPS has been steadily increasing. Even though it’s a tech, it’s in a supposedly growth industry (electronic health records.)
I have already bet 10% of my tax-deferred (401K) money on this, so I’d really like your inputs
(Another 10% - SYY. If nothing else, QSII makes it look safer by the minute.)
Normally I am a buy-and-hold long term investor (less than 10% churn in any year not counting incremental buying of the same stock for DCA.) But in this case, I am willing to give up my peace of mind for a juicy return.
I really hate that website.
I’m pretty familiar with CERN so this piqued my interest. Just glancing at the comps it looks cheap. Not cheap like a bargain, but cheap like it can’t catch a bid. Sniff test says value trap.
sweep…why does this seem like a value trap?
recho, i just flipped through their annual report…looks decent…how are the products? i’m trying to find reviews of them…got any ideas on the qualitative?
so i did more searching and this site here on the reviews is a huge concern…apparently the product sucks
Bringing medical records into the, well really, 20th century is a huge business. Cerner is the best in the industry followed by GE. You also have Allscripts that’s doing some pretty cool things and gaining market share. Ultimately though, this industry is going to consolidate. Whether that’s because Cerner will buy someone like QSII for some technology they want, or QSII just fades away I don’t know.
Cerner’s pipeline is jammed packed. They’ve got more hospitals wanting to get on board than they can handle. Meanwhile it looks like QSII is struggling to stay busy. Sales and earnings acceleration are slowing and they’re starting to miss estimates. Basically the death knell of a growth stock. CERN is trading at a PE of 36 and QSII is trading at 14. Maybe it’s a great deal, but I think the odds are it’s fading away. Also looks like they’re having trouble retaining executive management.
i’m passing on both QSII and Cerner (no way i’m paying 30+ multiple on something so difficult for me to understand)…unless i get to talk to more doctors who give their reviews i can’t be convinced…i’ll stick to my jpm, teva, goog, san etc…
I don’t own CERN, but since they’re a home town company I follow them closely. Plus I know a ton of people that work there and all our hospitals around here are fully integrated. What they’re doing is pretty slick. Should have been done years ago but doctors are slow to adopt anything. The ones that have think it’s amazing though.
You need to venture into the world of Growth Frankie. You value guys are too boring. Add a little spice to your life.
google, intel, jpm, teva…those are all growth…growth that i don’t have to pay for …i like the idea of EHR…
QSII does offer a juicy dividend…and their financial statement look good…
I’m allergic to growth. Show me a nice boring business that grows slowly or even is in decline…that is sexy.
I wish I understood how to value growth companies.
its easy…just assume they can grow at historical rates, add a few percentage given “industry expansion” and you have it…a stock trading in the 30x multiples…
i have noticed ppl are actually way more rosy on AAPL’s view overtime…they think they can keep selling these pads and phones forever at these prices…
I looked at this company somewhat a couple weeks ago
The numbers were ok, fcf generation isn’t the greatest but dividend payout is good. My guess for their recent weakness is the shareholder issues and weak margins last two quarters. Cogs % of revenue and gross profit margins deteriorated in last two quarters. I would figure out why this happened it could be from competitors (most are larger companies) stealing market share but I would look at substitutes/compliments. For example, mmodal and nuance. MODL recently got bought out a by a JPM PE firm and NUAN is putting up high sales growth and the monthly chart looks weird—like its settting up for a volatile move…
I’m not sure if NUAN is a competitor or compliment to QSII but you should read QSII transcripts to see why q/q margins are weak. I’m thinking more innovative products rather than direct competitors.
STL - trying to address all your points.
Why do you hate gurufocus.com? Are the 10-year financials not accurate? If so, not counting ValueLine/Morningstar (i.e. paid sites), what (free) websites offer 10-year financials?
Your (and Daddy’s) point about competitors is very good. I need to research more on how QSII’s market share is holding up.
Also true that the CEO of their NextGen division (Scott D) just left. But I wonder/hope if this is a temporary storm that’s artificially depressing the stock price. i.e. the proxy fight is the cause of executives leaving (worthless stock options etc.)
just from all the research gathered today (annual reports, product comments, comments here) it looks like NextGen is a company headed in the wrong direction…i’m excited to see how this plays out
i’m not so sure this companies’ problems can be seen directly in the financials (they looked decent overall, shrinking margins is not a big issue, every company goes through something like that), its more of a product/management problem at this point…
I do really like the sector. QSII may be an acquisition target, or it may be a case of rising tides lifting all boats. Or, maybe they do just have some transitory issue. I don’t hate the pick. Just don’t like the pot odds.
Edit: Oh, and as for that website…not sure exactly why I hate it. I just get the urge to break my monitor everytime I’m sent there. Just ugly and irksome.