Quality Systems
Inc develops and markets healthcare information systems in the US ;
they include systems that automate medical and dental practices and networks of
practices such as physician hospital and management services organizations,
ambulatory care centers and medical and dental schools. In addition, QSII
offers proprietary electronic medical records under the NextGen product
name. Its products include electronic
health records, enterprise appointment scheduling, enterprise master patient
index, NextGen image control systems, managed care server, electronic data
interchange, system interfaces, Internet operability and patient-centric and
provider-centric Wed portal solutions, NextGen Express for small practices,
revenue cycle management services which include billing and collections
services. The company has grown profits at
a 25% rate over the past ten though dividends have advanced at only a 7%
pace. Return on equity has been in the
15-20% range.
The company
witnessed a slowdown in profit growth as ambiguity in the regulatory
environment dampened sales; however, as clarity is gained once the election is
over, it should resume growth at an above average pace as a result of:
(1) expansion of
its client base, its product offerings and the rising demand of its clients for
its expertise,
(2) strong
demand in its NextGen division,
(2)
acquisitions.
Negatives:
(1) it is in a
highly competitive industry,
(2) its business
is overly concentrated in physician practice,
(3) weakness in
the software environment.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2005
Debt/ EPS Down Net
Value Line
Equity ROE Since 2003 Margin Rating
* QSII
has only paid a dividend for 9 years
**most companies in QSII
industry do not pay dividends
Chart
Note:
QSII made great initial progress off its
March 2009 low, quickly surpassing the downtrend off its September 2008 high
(red line) and the November 2008 trading high (green line). Long term the stock is in a trading range
(straight blue lines). Intermediate
term, it is in an uptrend (purple lines).
The wiggly blue line is on balance volume. The Aggressive Growth Portfolio owns a one
half position in QSII ---and got there by a
circuitous route. In 2012, it owned full
position. In mid 2012, the stock broke
below its Stop Loss Price. Our Portfolio
Sold about half the position---my strategy being to average out which was
clearly a mistake. But as you can see,
it broke down badly on one day, leaving me with the decision to Sell at a huge
discount or wait for a rebound. I chose
the latter and our Portfolio Bought some shares back in late 2012. The upper boundary of its Buy
Value Range Sell
Half Range
11/13
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