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***STOCK UPDATE: QUALITY
SYSTEMS (QSII:NASDAQ)
August 06, 2003
Sell ½ of LEXR
July 30, 2003
High Flier with 52% Gains
and a Dividend to Boot
July 16, 2003
Lexar Media up 62%
July 09, 2003
LEXR at 52-week high
July 02, 2003
LEXR up 45%
June 18, 2003
Looking Good at HON
June 11, 2003
The Heartbeat of ABMD
-- up 37%!
June 04, 2003
MO Dividend
May 28, 2003
Not Up in Smoke
May 21, 2003
ABMD Rollout
May 14, 2003
Hold the Dogs
May 07, 2003
Abiomed jumps 6%
April 30, 2003
Enjoy the JPM Ride
April 23, 2003
JPM up 9%
April 16, 2003
Send in the Dogs
April 09, 2003
MO No Mo’
January 29, 2003
In the Dog House
January 22, 2003
Holding the Dogs
January 08, 2003
Send in the Bulls
December 18, 2002
Six Traders, Six Winners,
90% Average Gain Since October
December 04, 2002
Book-um Dano! Bag an Average
137% on three plays in two months!
November 27, 2002
NT Up 63% - Hold
November 13, 2002
Open positions
November 06, 2002
NASDAQ 2,243 in 2003 –
NASDAQ 5,078 in 2016
October 30, 2002
The Future’s So Bright
October 23, 2002
TLK
up 8%
October 16, 2002
Still
Profiting
October 9, 2002
Midway
on Hold
October 2, 2002
MWY
Gain
September 25, 2002
HPON
on Hold
September 18, 2002
HPON
Hold
September 11, 2002
Bullish
on Gold
September 4, 2002
DG
Reports 8/29
August 28, 2002
Buy
Opportunity
August 21, 2002
Retail
Survivors
August 7, 2002
Average
20.6% Gain
July 31, 2002
Hold
NDN
July 24, 2002
Still
Loving the Fall
July 17, 2002
ITRU
up 68% - Hits 52-week high at US$3.23
July 10, 2002
NASDAQ
Down 31% YTD
July 3, 2002
Take
Profits on IBN
June 19, 2002
92%
Gains on IBN—Hold
June 12, 2002
Nuclear
Cool-Down = 79% Profits
June 5, 2002
Hold
Everything
May 29, 2002
Wink
up 39% -- Hold
May 22, 2002
Wink
up 39%
May 8, 2002
IC Update
May 1, 2002
Book
'em, Dano! Part III: Take 20% on EK and 6% on
XOM
April 24, 2002
Hold
JPM
April 17, 2002
EK
Doing OK
April 10, 2002
Beer
Deal of the Century
April 3, 2002
Book
'em, Dano: Take 22% on ABY and 3% on IP
March 27, 2002
31%
Gains
March 21, 2002
Sasol
Reports
March 13, 2002
Hold
Everything
March 6, 2002
SPP
Surge
February 27, 2002
Profiting
in a Market Slump
February 20, 2002
83%
on USOO
February 13, 2002
SPP
on the Rise
February 6, 2002
TMCS
Earnings
January 30, 2002
Hold
all Positions
January 23, 2002
USOO
Continues its Streak
January 9, 2002
Chip
Sales Rise
January 2, 2002
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***STOCK
UPDATE: QUALITY SYSTEMS (QSII:NASDAQ)
By Martin Denholm
By now, you should have received your August issue
of the Taipan newsletter in the mail. If not,
it is also now posted online at:
http://www.taipanonline.com
In it, you will see my article on Quality Systems
(QSII:NASDAQ).
Quality Systems is a rapidly-growing technology company
that develops software programs for the healthcare
industry. Specifically, it’s the market leader in the
EMR field (Electronic Medical Records), which means
its systems are used by doctors, dentists, hospitals,
clinics and pharmacies across America to store vital
data such as: patient information, personal health
records, appointment scheduling, referral information,
prescription/drug orders and insurance claims.
As you sit and read the article, you’ll see several
compelling arguments in favor of the company. At the
moment, just 15% of the healthcare industry uses EMR.
But not for long. It’s a rapidly-growing field, and
Quality Systems, as the market leader so far, is very
well-placed to take advantage as more and more companies
convert from antiquated paper filing systems to more
modern computerized versions.
Along with a solid set of financials, Quality Systems
recently scooped two top awards from industry watchdogs,
leaving the company’s competitors choking on its dust.
At the risk of repeating myself too much, you can read
my full report in the article.
But now, let’s cut to the chase. Quality Systems released
its fiscal year first quarter earnings on July 28.
I expected it to do well, but as we English folks say,
I was “gobsmacked.” Revenue surged by 33% to $16.3
million, with earnings totaling almost $2.3 million
(equating to 35 cents per share) from $1.6 million
(26 cents EPS) a year earlier.
Driving the gains…Quality Systems’s NextGen division,
which produces the EMR software. The subsidiary posted
record revenue of $12.2 million – an excellent 51%
rise from the previous year. In total, the results
allowed QSII to report a 40% rise in net income for
the quarter.
Good stuff. But nothing could have prepared me for
what came next. The stock absolutely took off, rising
by 16%, 8% and 3% in the three days after the announcement
(in all, it rose from a pre-earnings announcement of
$26.92 to a high of $36.10 on August 1). While this
rise was very encouraging, it was unfortunately tainted
with frustration, as you had not yet received my “buy” recommendation
(between $27.50 and $28.50) and had no chance to capitalize
on these gains. The rise was also extremely rapid and
gave me little time to put out an advisory alert.
I must say, I was pretty surprised, as the stock’s
technicals showed little sign of a springboard like
that before the earnings announcement.
So now that you have the issue, here’s the bottom
line: Do not buy shares of QSII just yet. My
buy price was based on the above and the fact that
it had traded in a flat range for several weeks
beforehand. But as a technology stock, occasionally
volatile price movements are no surprise. In fact,
it did the same back in May before pulling back
to the $26-28 range. At the moment, it looks slightly
overvalued at $34.75 and I expect the same pullback
again in due course and refill the gap around those
levels. Hold off for now and I’ll let you know
exactly when to get in. So stay tuned to this hotline
and the Taipan website and I’ll keep you
posted.
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MMM
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