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Quality Systems

quality systems 185It has been a big week for Quality Systems (QSII) — the healthcare information technology provider’s NextGen Healthcare Information Systems unit launched a clinical decision support tool last week, and its customer Willamette Valley Providers announced plans to go live with electronic health records.

Quality Systems, which provides practice management software to doctors and dentists, has high growth potential because providers will need to upgrade manual, paper-based systems to electronic systems.

QSII, which is up a market-beating 23% year-to-date, has a current dividend yield of 3.4%, as well as total cash of $130 million and no debt. Its price to earnings growth ratio of 2.25 is higher than I’d like, but its forward P/E of around 19 compares favorably to rival Medidata Solutions’ (MDSO) multiple of nearly 58.

I think now’s the time to take advantage of QSII’s dip from early August levels.

As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.

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