Allscripts-Misys Healthcare Solutions (NASDAQ: MDRX) is the result of the recently completed merger of Florida-based Allscripts and the health care information technology business of London-based Misys.
The nearly ill-fated merger finally closed late in 2008, after having to be restructured following the untimely demise of Lehman Brothers, the architect of the original merger plans.
The merger with Misys places the company in the forefront of the Obama administration's emphasis on improving health care in part by improving the availability of medical information in electronic form.
Allscripts' solutions are the cutting edge of medical information systems, and the company should benefit substantially from a move in the direction suggested by Obama.
MDRX provides clinical software, connectivity and information solutions to its health care customer base throughout the United States. The company delivers its products through four divisions: Professional Solutions, Enterprise Solutions, Health Systems Group and Medication Services.
It has a customer base consisting of more than 150,000 physicians, 700 hospitals and thousands of other health care providers, including more than 7,000 post-acute and home-care organizations. MDRX employs 2,500 people at its 20 U.S. locations.
The company reported better-than-expected second-quarter earnings on Jan. 9, indicating that the combined companies have implemented the merger well.
Analysts had, on average, estimated that the company would have earnings of 12 cents per share, excluding acquisition-related expenses. Second-quarter results adjusted for acquisition costs, however, came in at 14 cents per share.
Strong revenue growth and the growing demand for electronically available health care information have earned MDRX a position in the top 100 corporate performers, ranking number 23.
The combination of an aging population, increased demand for readily available health care information, and deeper involvement by federal and state governments in mandating electronic access to health records all bode well for MDRX's continued dynamic growth.
The company has a strong balance sheet, which positions it well to take advantage of growth opportunities likely to emerge in the coming years. With relatively little long-term debt on the balance sheet, MDRX has a debt-to-equity ratio of less than 40 and a current ratio of 2.07.
MDRX is currently trading at a little more than $9 per share, well above its 52-week low of $4.20 and 45% lower than the high of $16.67 for the period.
With many analysts holding to their outperform rating for the stock, it is likely that the upward climb the stock recently experienced will continue.
Louis Navellier's PortfolioGrader Pro, which offers free ratings for nearly 5,000 Wall Street stocks, rates the stock and A or Strong Buy.
Jamie Dlugosch is a contributor to NavellierGrowth.com.
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