Sorry, I only watch CERN from the sidelines. My reticence stems from years of working with Cerner systems and contrasting them with other vendors' products. My last client implementing Cerner almost had a revolt by the HIM department, as the chart extraction for legal discovery requests had so much incorrect information, and the client had not given much thought to that side of the house. On the other hand, the build tools and GUI are much improved over the past 10 years. Cerner will remain a major player for the foreseeable future, but not dominant.
It will be interesting to contrast the future churn rates between Epic clients switching to Cerner and vice versa.
Fuzzy, You have my congratulations for NOT being short CERN since 2001, and my condolences for NOT being long. As coincidence would have it, I made my first of many, many long positions in CERN in 2001 when its split adjusted price was $6.70. Now it is $58.75 and even though I have bought and sold over the years, I have remained at all times long, never short, never lost money, and my returns has multiplied accordingly, which always brings warm feelings to my heart. I have assumed in the past that your persistent, years-long, gray, cloudy, gloomy attitude about Cerner's future is the result of NOT having these warm feelings that great investment experiences can provide.
I don't claim to be the expert on short-term stock price fluctuations, but Cerner's recent pullback from its highs, on the heels of the good news of the DOD contract and its humongous potential, seems to be a result of short-term investor expectations; "I want my earnings, NOW!" The DOD win will take years to fully cash in on. Those of us who have been rewarded by patiently holding CERN long-term will undoubtedly be rewarded yet again.
Fuzzy, leave the dark side. Join us in the fight for truth, accuracy, justice, high investment returns, and warm feelings of the heart!
Yes, I guess I picked the wrong 12 months to bet you on, and have admitted your rosy prediction was correct for that period. However, investors in CERN over the past 12 months have seen a paltry gain of around 0.6%, while the Dow was up around 6% in the same period.
Still, one must legitimately be concerned at the performance given the great potential of the DOD contracts. That's had no salutary effect on the equity. As always (well, at least since 2001), I have no position in CERN long or short.
Perhaps. But perhaps not. I suggest it is too soon to tell. At the time Mr. Monett posted this, the stock was around 59. It is now about 58.25, down about 1.3%. I certainly would not suggest a big fail using those numbers. The real judge will be the results over the next year. And we know how good you are at forecasting that. ;-)
That sounds like short term thinking. "Screw the future! I want my earnings NOW!" Cerner has always put future growth before short term earnings. Also, you can't provide earnings on 'new contracts', no matter how hard you try.
Do not agree. Take a look at the 5 yr chart & the 10 yr chart. This is no a day-trader stock!
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Let me add one thing to #2. I can't help with #1 without a crystal ball.
The key differentiator, from what I can tell, between Cerner and Epic is the focus on interoperability between systems by Cerner. That is the reason they were favored to win the DOD contract, though I can't say ultimately why they did win; that is the presumption. So while I have heard that Epic is the preferred system for users, Epic has had more of an Apple strategy, when by the nature of consolidation of healthcare, most hospitals, doctor networks etc have multiple systems that all need to work seamlessly. The practical reality of that is if you're going to upgrade, going with a provider that works with your current IT and also gives you future flexibility, gives you a leg up on the competition. Being a closed system is great if you can pull it off like Apple has done recently. But not everyone is Apple and in this industry, that's a more difficult proposition.
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Whoever would have real answers to those questions would be sitting pretty, but of course, the real answers only exist in the future, and those able to tell the future with certainty are like unicorns. Here are some thoughts, though...
1. Combining realistic and best case as guidance for this prediction, I suggest that $82 a share (after one future split in the next few years) best fits your guidance. That would be $194 at today's price, factoring in that future split. And yes, that does suggest continuing exponential growth. A simple statistical analysis of Cerner's stock price history demonstrates a consistent exponential growth, sometimes on hold for up to a few years, but consistent over the long term. Over the past 10 years, predictions of the end of exponential growth for CERN have been made by many, and proven woefully incorrect. Given the aging of people residing in nations with advance economies, coupled with the continuing population growth of the world in nations with developing economies, AND with the apparent willingness by most to throw a greater percentage of GDP at health care, a suggestion of continuing exponential growth for health care companies seems reasonable.
2. Very simply, competition is good for consumers, the suppliers, the industry, and the economy as a whole. Besides being very vision focused, Cerner historically has responded to both consumer demand as well as to competition. Having just vision, or just customer demand, or just competition as a motivator is not so good. Having all three is best. I fully expect Cerner to continue to respond to competition, for the benefit of all, including Cerner.
Hello to CERN longs.
Just starting to look at this company as an investment. To the most bullish of the LONGS, what do you think about the following:
(1) 5-7 year time horizon, what do you think the realistic best case scenario is for share price? Could this be another ISRG (I know its a different type of company but in terms of exponential growth)?
(2) Main competition is a private company that may be more liked by doctors/hospitals. Any thoughts on this?
Apologies for the basic questions. Any responses appreciated.