Why Cerner Shares Zoomed Higher

Why Cerner Shares Zoomed Higher

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 Cerner , a health-care information technology company, advanced as much as 13% after inking a multi-year partnership with privately held Intermountain Healthcare.

So what: Under the terms of the deal, Cerner will be deploying its electronic-health records (EHR) and revenue cycle management software across Intermountain's network of 22 hospitals and 185 outpatient clinics. The move is expected to improve Cerner's upcoming quarterly bookings, and should only add fuel to the fire that Cerner is among the elite in terms of EHR software and data analytics.

Now what: Another day, another win for Cerner! There's little doubt that the upcoming health reform is going to work in Cerner's favor, with hospital operators needing to keep their costs under control now more than ever. Cerner's revenue cycle and data-analysis software are tools hospital operators should be turning to even more over the coming years. However, with the company valued at 31 times forward earnings, I can't help but feel that a majority of this optimism might already be baked into its share price.

How you can take advantage of rising health-care costs
Rising health-care costs continue to be a hotly debated topic, and even legendary investor Warren Buffett called this trend "the tapeworm that's eating at American competitiveness." To learn more about what's happening to the health-care system -- and how to potentially profit from this trend -- click here for free, immediate access.

The article Why Cerner Shares Zoomed Higher originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.