SXC Health Solutions Corp. (USA) (SXCI)

SXCI is a provider of pharmacy benefits services and IT solutions. product offerings include a range of PBM software, asp processing& PBM . The company has D/E .10 bk $8.65 cash $10.66 Short 2.08%.3rd qtr eps.47 vs analyst .40, beat last 8 qtrs.

Look for this one to be GOBBLED up by a bigger player....

5/21/9 IBD SRH > 0, AND [P/E < 20 OR OLE > <35>]

healthcare IT is hot and will remain hot

1% of the IBD 100.

The stock is in the midst of a high volume breakout, and has what appears to be virtually limitless room to run if it clears $21.60. There has been clear buying pressure since Nov. 13, 2008. Fundamentally, the firm should benefit from the new administration’s commitment to digitizing health care records – this explains the timing of the buying pressure.

quick four day runup

Healthcare effiicencies are inevitable and SXCI delivers the necessary mangement tools. Likely that post 2008 elections will trigger healthcare reforms and budgetary commitments.

Buying a company over 6 times your size, which lost money over the last year, rarely benefits shareholders over the long term. Given the debt load and uncertain nature of the combined company's cost savings and growth, SXC is definitely too risky to be a 5 star stock.

An aging population & more outsourcing of benefit management can only mean growth in this sector & SXC is better positioned than many of the other players to benefit from this. Good company.

Small and nimble company servicing Big Pharma with needed applications throughout North America. Lots of room for growth. Buy and hold.

They're drug dealers.

Healthcare is always a strong industry

With a tech advantage the established players have yet to match, and a sneaky :) Toronto Venture Exchange listing, SXCI has won several major government contracts and is going for several more. Either a more established player will buy them out, or SXCI will continue to undercut the big guys on price....thereby winning more contracts and making more money.

Key player in medical prescription market. Continues to build client base.

I am sure

Long term growth expected. I expect a slight downturn in another month or so followed by a steady climb for the next year or so.

SXCI has recetly been chosen by Amerigroup to provide pharmacy benefits in Georgia, and they've also been made aware of a potential contract worth $27 million over the next 4 years if they accept it.

1) Demographics - more and more people will be requiring health care, placing demands on both benefits systems and management systems.

2) Business Model - moving to an ASP model will position this company well to profit from the Demographic trend. More "requests" equals more revenue, equals higher earnings.

Systems Xcellence Inc. (SXC) is involved in the business of providing healthcare information technology solutions and services primarily in U.S. and Canada. It offers pharmacy benefit management services and software products to different variety of customers in the pharmaceutical supply chain, though payor customers that include managed care organizations, blue cross organizations and government agencies, contribute over 60% to the revenue tally. SXC’s total revenue comprises of inflows from transaction processing, maintenance, systems sales, and professional services. The transaction processing and maintenance generate about 65% of the revenues, and as they are recurring in nature, it gives a level of certainty to the future cash flows.

The influence of IT on the pharmaceutical supply chain is witnessing a growing influence. With approximately more than 3.6 billion pharmacy prescriptions written in U.S in a year, the potential for providing specific software and solutions is robust. Moreover, an aging population base, rising drug prices, and increased advertisings are having a positive impact on the industry, creating a possible market opportunity of around $4.5 billion annually.

SXC is currently observing a strong performance, with revenues rising by over 50% due to growth in the Transaction Processing, Maintenance, Professional Services and System Sales segments. Net Income also more than doubled as a result of improved margins. Looking ahead in 2007, the transaction processing volumes are expected to be strong, leading to sturdy recurring revenues for the company. Moreover, the strong fundamentals of the pharmaceutical industry, the growing adoption of IT for pharmaceutical benefits management, and growing volumes of customer base, makes SXC a healthy investment.