A Good Long-Term Play on Health Care?
The difference between a broken stock and a broken company is not always clear, but Cramer considered one example on Tuesday's Mad Money.
Allscripts-Misys Healthcare Solutions produces software that modernizes workplaces in health care – think electronic filing, claims and prescribing systems. Cramer has liked the stock since January 2009 when it was trading at $8.04. MDRX has produced a 106% gain since then, but it hasn't been doing well lately, dropping 25% since April.
But there are still a lot of reasons to like MDRX. It serves a larger, underpenetrated market, has a strong distribution network and should benefit from health-care reform, which President Barack Obama has signed into law. Plus, the stimulus bill includes $36.5 billion worth of incentives for health-care professionals to adopt electronic health records.
While Cramer likes the long-term outlook, he thinks the stock will need time to recover. MDRX dropped 10% after announcing plans to acquire Eclipsys, another health-care software company, for $1.3 billion. This is a good business move, Cramer said, but it won't help the stock. To learn about the company's prospects moving forward, he spoke with CEO Glen Tullman. Watch the video for the full interview.
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