| Stock (Symbol) | Stock Price | |
Cerner Corp (CERN) |
$64 |
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| Data is as of | Expected to Report | Sector |
August 17, 2015 |
Oct 21 – Oct 26 |
Healthcare |
| Sharek’s Take | ||
 Cerner is the largest healthcare IT company in the world with 18,000 clients in 30 countries, and an R&D budget of $650 million a year. CERN is also a great stock, compounding at a rate of 21% the past decade on the back of 23% profit growth per year. The company’s IT systems are the backbone of many hospitals and doctor practices, and 78% of its revenue is recurring with profits up each year since 2003. CERN hit a high of $75 earlier this year and fell after it lowered 2015 revenue estimates slightly because in the CFO’s eyes analyst estimates were a tad too high, and stated “I’m not going to have a ‘my bad’ next qtr”. Still, sales jumped 32% and profits rose 30%. Not bad. I purchased CERN today for the Growth Portfolio and Aggressive Growth Portfolio at $61 and intend to hold the stock for many years, as I have sold it before only to see it continue higher. |
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| One-Year Chart | ||
 The one year chart looks solid outside the 17% Est LTG. CERN is growing much faster than that this year. I used to think a P/E of around 30 was high for this stock, but CERN often has a P/E in the mid-30s. |
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| Earnings Table | ||
 Cerner grew sales 32% as profits increased 30%. This is a good year for CERN which I consider to be a high-teens grower.
CERN has met profit estimates the past 4 qtrs. |
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| Fair Value | ||
 Although profits have grown 23% per year during the decade, the stock’s typically had a P/E in the 30s. Today I picked up the stock for 29x earnings. |
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| Ten-Year Chart | ||
 So I sold CERN at $10 in 2009 because I felt healthcare was a place to exit as the new Bull Market started. Boy was I wrong. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
9 of 23 |
Cerner is a core holding for both conservative investors and growth investors, and is a great pickup in this turbulent stock market. This is one of the stocks you hope to buy on a dip and CERN is down around 20% from its highs giving investors an opportunity. |
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Aggressive Growth Portfolio
9 of 13 |
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