September 28, 2009 - Cerner Corp. (CERN-NASDAQ) provides healthcare information technology solutions, healthcare devices, and related services in the Americas, Europe, the Middle East, and the Asia Pacific region. It offers Cerner Millennium architecture which provides access to an individual's electronic medical record at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front and back-office professionals, and consumers.

Further, it provides HealtheSM, a health plan third party administrator service; RxStation medication dispensing devices; Millennium Lighthouse, a consulting practice that works with clients to discover relationships among healthcare processes and outcomes; Health Facts, which are solutions and services that leverage the clinical data captured in the digital healthcare environment; PowerWorks physician practice solutions; and Cerner Imaging, a technology that enables clients to import audio, video, and still images into electronic medical records. Additionally, the company offers remote hosting, operational management services, and disaster recovery services.

It serves integrated delivery networks, physician groups, managed care organizations, hospitals, medical centers, reference laboratories, home health agencies, bloodbanks, imaging centers, pharmacies, government agencies, and public health organizations. The company was founded in 1979 and is headquartered in North Kansas City, Missouri.

Cerner is all about digitizing health care, a top priority for the Obama administration. Probably why the stock has more than doubled since the end of last year, going from $30 to a recent all-time high of $75.41 (prices reflect a 2 for 1 stock split in early 2006).

Revenues slowed a little this year. The average annual increase for the last 5 years was 13.5%. In 2008, total sales were $1.65 billion. This year, analysts see $1.69 billion, or a 2.5% improvement. Next year, though, they expect $1.86 billion, a 10% increase.

Cerner isn't immune from economic difficulties. Recently, the company said that healthcare providers are cutting back on their purchases. However, the Obama administration has developed incentive payments to encourage providers to go digital. While the health-care reform bill has not been fully crafted, at some point there will be legislation that incorporates healthcare information technology. That should happen by the end of this year or the beginning of next. When it does, expect more providers to expedite their transition to digital record keeping because the government will pay them to do so. That fact is most likely the reason the stock hit a record high on September 22.

More numbers: Market cap is $5.7 billion. Forward p/e is 26. Price to book is 4.15. Operating margin for the last 12 months was 17.65% while Profit margin was 12%. Total cash is $384.1 million which is $4.74 per share. Total debt is $148.42 million or about 8% of capital. Current ratio is 3.08. Book value is $17.63. There are 81.04 million shares outstanding with a float of 69.54 million. Insiders own 16.17%.

Cerner is in the right place at the right time with the right products. Investors already know that and have bid the stock to new highs. If for some reason a health bill isn't passed, this stock will crater in a very painful way. But with the efficiencies of digital information obvious to everyone, it seems likely that no matter how the bill is finally written, there will be a provision for all healthcare providers to stop the paper flow and get into the 21st century. Cerner can certainly help them.

- Company Web site: www.cerner.com

 Ted Allrich