Cerner Is a Buy on a Pullback

by Sam Collins | October 29, 2012 6:16 am

Cerner (NASDAQ:CERN[1]) — This leading supplier of health care information technology is in a powerful bull channel that began in November 2010.

We recommended CERN on Oct. 21, 2011[2], at about $66 with a target of $75. It made it to over $78 in March, and then ran to a high of over $84 after crushing earnings estimates. Then, on May 21[3], it was recommended to buy on a pullback to $75, and it ran to over $88.

On July 9[4], I said, “Now CERN has turned from the top of its bull channel, so try to buy it on a pullback to around $80. Our target is still at $95. Note the high volatility of this stock, which can be an advantage to the trader and long-term buyer. But don’t chase this stock. Let it come to you.”

And on Sept. 24[5], with the stock at $74, I said, “The current opinion of analysts has not changed and neither has mine.”

Last week, CERN retreated to the bottom of its bull channel under $68, and on Friday, popped by almost $9 on better-than-expected earnings per share of 58 cents versus an estimated 45 cents for the quarter. The company also raised its long term-earnings and revenue estimates.

My target is still $95, but following the big gap made on Friday, it may give us a chance to buy again at about $74.

Trade of the Day – Cerner (NASDAQ:CERN)
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Trade of the Day Chart Key

  1. CERN:
  2. Oct. 21, 2011:
  3. May 21:
  4. July 9:
  5. Sept. 24:

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