Recommendation Updates

Follow the latest news on active Turnaround Letter purchase recommendations.

Mid Cap / Healthcare Equipment & Services

Allscripts Shares Rally Despite Quarterly Loss: Management Cites Momentum in the Global Health Care IT Market

Allscripts Healthcare Solutions (NASDAQ: MDRX) announced its financial results for the three and nine months ended September 30, 2015. For the quarter, bookings were $272 million, a third-quarter record, compared with $223 million in the third quarter of 2014, a 22 percent increase. Sales were strong across core clinical and financial solutions, population health management and managed services. Growth was robust across both the ambulatory and acute markets, including two new client footprints for the SunriseTM electronic health record (EHR) solution. Forty-four percent of third-quarter bookings related to software delivery, while the remaining 56 percent was derived from client services. This compares with 52 and 48 percent of bookings attributable to these revenue categories, respectively, in the third quarter of 2014. Software delivery bookings increased 4 percent year over year in the third quarter of 2015. Client services bookings increased 42 percent year over year in the third quarter of 2015. Contract revenue backlog as of September 30, 2015, totaled $3.6 billion, a 4 percent increase over the prior-year amount. Revenue totaled $355 million, an increase of 3 percent compared with $345 million in the third quarter of 2014. Software delivery, support and maintenance revenue totaled $231 million in the third quarter of 2015, up 1 percent compared with the third quarter of 2014. Software delivery, support and maintenance revenue consists of all software, hardware, subscription and transaction-related revenue as well as support and maintenance. Client services revenue totaled $124 million in the third quarter of 2015, up 6 percent compared with the third quarter of 2014. Client services revenue consists of recurring managed services and other project-based client services revenue. Recurring revenue, consisting of subscriptions, recurring transactions, support and maintenance, and recurring managed services, increased $16 million compared with the third quarter of 2014; an increase of 6 percent year over year. Non-recurring revenue, consisting of systems sales and other project-based client services revenue, declined $9 million or 9 percent, compared with the third quarter of 2014. Non-GAAP net income in the third quarter 2015 totaled $25 million compared with $12 million in the third quarter of 2014, a 113 percent increase. GAAP net loss in the third quarter 2015 totaled $5 million compared with a net loss of $26 million in the third quarter of 2014. Non-GAAP earnings per share in the third quarter 2015 were $0.13 compared with $0.06 in the third quarter of 2014. GAAP loss per share in the third quarter 2015 was $0.03 compared with a loss per share of $0.15 in the third quarter of 2014. Cash flow from operations in the third quarter 2015 totaled $40 million compared with $14 million in the third quarter of 2014. For the nine months ended September 30, 2015, cash flow from operations totaled $128 million compared with $52 million for the nine months ended September 30, 2014, a 147 percent increase. Paul M. Black, Chief Executive Officer of Allscripts, stated, “Allscripts third-quarter and nine-month results illustrate our momentum in the global health care IT market. Bookings grew 22 percent in the third quarter of 2015 and increased 13 percent year-to-date. Total bookings were at record levels for a third quarter, driven by a healthy mix of sales across major software solution categories and value-added services. We added major new EHR clients in the US and United Kingdom and expanded strategic partnerships with key ambulatory clients such as Catholic Health Initiatives.” Mr. Black concluded, “Allscripts financial performance continues to improve each quarter across all key financial metrics, including: recurring revenue, gross margins, Adjusted EBITDA, non-GAAP earnings per share, cash flow from operations and free cash flow.”

Read More Purchase Recommendation Updates

Identify & Profit from Distressed Investing

Free Report: Turnaround Investing Mistakes

Turnaround Investing Blog

Turnaround Investing Blog

Is there value in bankrupt PG&E’s stock?

In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.

Read More.

EV/EBITDA: What Is It & Why Are We Using It More?

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

Read More.

Turnaround Letter Stock Pick Named Top Performer of 2017

 

stock market advicex

 

What Last Year's Top Stock Pickers Are Buying in 2018

 

This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.

 

George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."