MedAssets Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of health-care IT services specialist MedAssets (NAS: MDAS) climbed as high as 12% in intraday trading Monday after its quarterly results topped Wall Street expectations.

So what: Driven by strong growth in all of its segments, MedAssets posted an adjusted profit of $0.23 per share, versus the average analyst estimate of $0.16 per share. The stock has been crushed in 2011, down about 40% over the past six months, so shareholders are naturally hopeful that today's results trigger the start of a prolonged comeback.

Now what: I wouldn't jump into the stock just yet. Unfortunately, management also cut its full-year revenue and low-end earnings outlook today, suggesting that longer-term picture isn't quite as bright as the rally indicates. With the larger, more-established, dividend-paying rival McKesson (NYS: MCK) available at a reasonable price, passing on MedAssets seems prudent.

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At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of McKesson. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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