Quality Systems, Inc. (NASDAQ:QSII)

For reference point and to allow for comments by others. As of the end of March, 2013.

ROE 14.19%
Trailing PE 25.03
PB 3.51
Div yield 3.90%

view analysis here: http://wall-street-for-main-street.blogspot.com/
• YLD: 3.87

• ROEQ: 20.51 5YR: 32.09 9YR: 31.15

• SALES GR: 21.64 5YR: 15.47 9YR: 27.88

• EPS GR: 20.75 5YR: 15.47 9YR: 27.88

• A/L: 3.70

• PE: 17.37

• P/B: 3.36

QSII - #19 on: "The Forbes Fast Tech 25: Our Annual List Of Growth Kings" (5/02/2012)

forbes.com/sites/ericsavitz/2012/05/02/the-forbes-fast-tech-25-our-annual-list-of-growth-kings/2/

Here's the entire (1yr old & presumably - outdated) tech industry's "List Of Growth Kings" (in a descending pace of growth)

01 LNKD caps.fool.com/Ticker/LNKD.aspx Social Networking
02 AAPL caps.fool.com/Ticker/AAPL.aspx Computer Hardware/Software
03 QLIK caps.fool.com/Ticker/QLIK.aspx Business Analytics Software
04 ATHN caps.fool.com/Ticker/ATHN.aspx Cloud-based Healthcare Services
05 EQIX caps.fool.com/Ticker/EQIX.aspx Data Center Services
06 EBIX caps.fool.com/Ticker/EBIX.aspx Software/E-commerce Services
07 ARUN caps.fool.com/Ticker/ARUN.aspx Wireless Equipment
08 RVBD caps.fool.com/Ticker/RVBD.aspx Networking Equipment
09 CTSH caps.fool.com/Ticker/CTSH.aspx Computer Programming Services
10 SFLY caps.fool.com/Ticker/SFLY.aspx Online Digital Photo Services
11 FIRE caps.fool.com/Ticker/FIRE.aspx Security Systems Services
12 SWI caps.fool.com/Ticker/SWI.aspx IT Management Software
13 SREV caps.fool.com/Ticker/SREV.aspx Revenue Management Software
14 SNCR caps.fool.com/Ticker/SNCR.aspx Transaction Management Systems
15 ACOM caps.fool.com/Ticker/ACOM.aspx Online Genealogy Services
16 FTNT caps.fool.com/Ticker/FTNT.aspx Security Systems Services
17 PEGA caps.fool.com/Ticker/PEGA.aspx Business Management Software
18 RAX caps.fool.com/Ticker/RAX.aspx Internet Software/Services
19 QSII caps.fool.com/Ticker/QSII.aspx Healthcare Software
20 EGOV caps.fool.com/Ticker/EGOV.aspx Information Retrieval Services
21 RHT caps.fool.com/Ticker/RHT.aspx Open Source Software
22 GPN caps.fool.com/Ticker/GPN.aspx Electronic Payment Services
23 CVLT caps.fool.com/Ticker/CVLT.aspx Systems Software
24 CACI caps.fool.com/Ticker/CACI.aspx Government Technology Services
25 VRSN caps.fool.com/Ticker/VRSN.aspx Internet Software/Services

Solid balance sheet should support continued dividend. Out of favor now but will rise from here. Wish I had bought a bit earlier. Bought in @ 17.70. Missed buying Netflix at 75.

They seem closely tied to Microsoft (bad)and have had an early in to an industry that should be poised for explosive growth. Have they squandered a lead that should have set them apart? I feel so....

Quality Systems has quality problems.

low/no debt, free cash flow, and a history of increasing EPS over the last several years. Overall this is a market segment which will only grow in next decade, and QSII seems to be a well-run company capable of expanding with the market.

Value Pick

Quality Systems has a few things going for it. It has a solid dividend, growing revenue and net income, no debt, growing assets, and growing shareholders' equity. I played this one after Mr. Market squeezed out a lot of funny money from the market cap a few months back. While investors are still paying a premium for growth (only $300 million in shareholders' equity with a $1+ billion market cap) it is certainly much less expensive than before. Of course, there is no reason to think it can't be punished further (see MAKO, TRLG, ARCO, etc). Outperform for now.

great company that is oversold

P/E ratio is low. Stock is undervalued do to management issues. New software releases and new management will help bring the companies stock price closer to $35.

challenging leadership and board issues have hurt what was and still can be a growing company in a growing industry supported by growing legislation

It becomes more certain that Obama will get re-elected and that Obamacare is here to stay.

Oversold

Very cheap. The sell off was way overdone yesterday.

This is an outstanding business trading at an extremely low valuation. The company operates in an industry that will continue to grow at a rapid rate over the next couple of decades. While I may not know what will happen over the next few quarters, over the long run well positioned companies in this industry (such as QSII) will almost certainly do very well. This is one of the rare stocks that I would give an A+ rating to.

Chart says we will see $19 a share!

Quality Systems was added to my caps at a price of $28.52. The PE ratio is 22.28. Cerner PE is 41.07

They expect to grow earnings about 20% to 25% which would mean net income per share of $1.53 to $1.60. Analysts believe that will make $1.55. The guidance didn’t include expansion overseas. One of their future drives of growth is International expansion and they are working on an international strategy now.

There is growing momentum in the revenue cycle management (RCM) category of their business. Timely bill payments aren’t common in the health insurance, physician, patient cycle, so a method to ensure timely collections would be a good thing for the industry. It isn’t always the patient that causes the delay. This category could be very good for QSII going forward.

They have just begun to try to expand their business overseas, so again another potential stream of future revenues. There is plenty of growth left in the U.S too.

The stock price has dropped since Cerner reported 30% revenue growth for the fourth quarter. But I don’t believe Cerner's success is a good reason to sell QSII which is also doing well.

QSII fourth quarter report was disappointing, but management said the reason for disappointing sales growth was due, according to QSII, “to delays in both the closing of several fourth quarter opportunities, as well as recognition of revenues related to a large customer implementation.” If this is true the next three quarters should be better and it becomes more likely that growth is intact and that the company will be correction about guidance.

Again Cerner is doing very well. But they are also selling for about twice QSII valuation. QSII PE stands at about 21.98 compared to a PE ratio of 41.07 for Cerner.

Fool screen with ROE high, ltDepbt=zero, earnings up for 3 years 10%, etc.Market is around 1300 - I see support at 1200 although we are in downtrend and Europe is scary. It's a game - hope for the best.