Health Care IT Providers Sell Off Following Allscripts’ Narrow Beat
Health care IT provider Allscripts-Misys (Symbol: MDRX) reported earnings of $0.17 / share Monday before the bell, narrowly beating analyst estimates of $0.16. The company also raised FY ’10 guidance and CEO Glen Tullman expressed expectations of, “significant acceleration in the adoption of health-care information technology in 2010 with help from the government’s economic stimulus plan.”
Nonetheless, this did little to help the stock, as shares fell over 4% on above average volume, finishing the day at $18.98. The primary reason behind the sell-off appears to be lackluster total bookings of their IT services.
MDRX took down much of the health care services sector with it on Monday, as stocks such as Medifast, Inc. (MED) and Athenahealth, Inc. (ATHN) traded down significantly.
On the bright side, MDRX touched support at it’s lows for the day and held, and even began to trade up a bit during the after hours session.
In the end, even though we’ve received some clarity on the Obama-care situation, the questions that remain still make this a tough sector. But considering the relative strength of much of MDRX’s report, if shares can hold support again tomorrow, and especially if they can push through the 50-day MA at $20.06, you may have a solid entry point on a name that is likely to become stronger as the health care situation continues to clear up.
Disclosure: No positions in MDRX, MED, or ATHN.
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