Lee. I was short on time yesterday, gave you a poor response and probably should not have. Isee this stock moving toNasdaq soon. Out yesterday, maybe this will help?
A friend forwwarded this to me this a.m.:
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The Insider Review Monday November 22th, 1999 SPECIAL REPORT
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A complete verision of this report is posted on the website at
theinsiderreview.com
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Company: e-MedSoft.com (OTCBB:MDTK)
RecentPrice: $ 4 3/32
Outstanding Shares: 51.8 million
Public Float: 8 million
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BACKGROUND
With millions of customers, practitioners and agencies to deal with, the
healthcare industry is not only information intensive, but - because of
this overload of information - traditionally inefficient. It is this very
dilemma that puts this industry in a prime position to utilize the power of
electronic practice management systems that the Internet can provide. The
Internet continues to transform technology into a cost-efficient, easily
managed and profitable situation. It presents an ideal formula for
controlling healthcare's complex network of hospitals, practitioners,
payers and service providers all within a single - and easily administered
- environment. The need for simplified and online medical information and
transaction processing software is evident.
Our feature company, e-Medsoft.com (OTCBB:MDTK), with its core medical
software product being sold under the trade name e-MedSoft.com, is leading
a transition in the medical industry, as it is the first subscription-based
healthcare management system available for delivery through the Internet.
Users of the software are charged a small up front installation fee, and an
ongoing subscription fee based on transaction volume. The medical software
is a complete healthcare management system. Through the Internet, its
Java-based integrator, utilizing Sun Microsystems, Inc.'s (SUNW:NAS) Java
technology, allows the e-MedSoft.com software to communicate across diverse
platforms and languages in unlimited capacity, allowing for the interlink
of doctors, hospitals, clinics, HMOs, insurance companies, financiers and
government agencies.
PROFILE -
Within the Micro-Cap environment a rash of buy recommendations hit the
"cyber-waves" daily. A large majority feature E-commerce companies, but are
based on shallow and short lived news featuring web-site "grand-openings",
meaningless affiliate deals, and a variety of other hyped-up reviews.
e-MedSoft.com presents investors with an array of potential revenue bearing
features that have the substance to produce over a long period of time.
1) The e-MedSoft.com solution is a complete healthcare management system,
designed for use by clinical care providers and payers to support all
aspects of patient care management in virtually all healthcare
organizations including Integrated Delivery Networks, hospitals, long term
care facilities and ambulatory clinics.
2) A Four-Tier Distributed Architecture that provides customers the ability
to respond more effectively to changing business needs by allowing easy,
real-time modification to the logic for business processes.
3) A 10-year contract with University Affiliates IPA, an affiliate of the
University of Southern California School of Medicine and the nation's
largest fully accredited IPA, providing the company with exclusive access
to a growing network of more than 2,500 physicians and 80,000 patients.
4) Through the Internet, the company's Java - based Integrator allows the
system to communicate across diverse platforms and multiple languages,
allowing for the connectivity of any healthcare organization
5) A co-marketing, co-selling, and technical and intellectual
capital-sharing relationship with Sun MicroSystems, the creators of Java
and Sanga, a worldwide developer of packaged application software.
The need to minimize costs and the need to manage information, particularly
across organizational boundaries, are the two basic drivers in the
healthcare industry. The e-MedSoft.com product appeals to both. The system
is implemented with ease and low cost, and its Internet connectivity along
with its ability to allow for the exchange of information across diverse
platforms and systems, make the product an ideal candidate for adoption by
the medical community.
PRODUCT -
The solution e-MedSoft.com offers is a complete healthcare management
system, including eligibility management, patient care, referral
management, claims, management, scheduling, census management, utilization
management, medical records and reporting. It also features the
adaptability to add and deliver, medical applications relating to
diagnosis, care outcome analysis, knowledge-based informational databases
and drug interaction information. This solution is designed for use by
clinical care providers and payers covering the complete spectrum of
healthcare management.
Generally the most typical client-server architectures contain two or three
tiers that integrate the business logic with the application
infrastructure. This does not allow for easy adaptability to changing
business rules. By utilizing a four tier structure, e-MedSoft.com provides
customers the ability to respond more effectively to changing business
needs by allowing easy, real-time modification to the logic for business
processes.
e-MedSoft.com's 4-Tier architecture is structured through:
Tier 1: Platform Neutral Interface - Applications are delivered as Java
Applets ( or HTML), which can be executed from any Java-enabled PC's,
workstations, network computers and dumb terminals, connected through an
intranet, extranet or the Internet. e-MedSoft.com's thin-client, Web-based
architecture offers access to a broad range of users including customers
and suppliers and allows for efficient deployment of new and modified
applications.
Tier 2: Business Logic - By developing industry-specific business
applications, e-MedSoft.com has broadly packaged the functionality required
for each industry, accelerating the development and customization process.
e-MedSoft.com's business rules enable trained users, outside of traditional
IT organization, to easily modify the logic for business processes in real
time without interrupting the operation of existing systems.
Tier 3: Infrastructure Modules - The infrastructure consists of several
modules which manage the use of resources by the business applications and
client interfaces. These infrastructure modules provide programmers with
the basic software operations common to most programs - including naming,
security, transactions and collections - freeing programmers to concentrate
on situation-specific logic. The infrastructure can also be leveraged to
speed the development and delivery of large-scale vertical applications and
to provide customers with new services not available with more common
computing infrastructures.
Tier 4: Database and Resource Interfaces - e-MedSoft.com's 4-Tier
Architecture provides a standard mechanism of access to data, regardless of
the underlying data storage or business transaction formats. Data can be
directly accessed in relational databases from Oracle, IBM, DB2, Sybase and
Informix. By separating the resource interfaces from the business
applications, other data source interfaces can be created to access data
without changing business rules or interfaces.
MDTK's technology has another advantage. It has a portability that allows
it to be profitable in industries other than healthcare. e-Net Technology
Ltd., is a wholly owned subsidiary of e-MedSoft.com. Through its
subsidiaries e-Net Systems and e-Net Software, e-Net Technology offers
services and solutions that remove the complexity of web-enabling business
processes. The e-Net group combines in-house expertise with strategic
partners to cover the fundamentals of delivering e-Commerce and e-Business
solutions. e-Net Technology's dedicated quality of service and a continuing
focus on the development of leading edge JAVA technologies drives their
clients Internet business to success.
TECHNICAL ANALYSIS AND CONCLUSION -
MDTK formed an excellent double bottom in the $2 area, after selling off
earlier in the year. The stock has moved ahead rapidly since mid-October on
rising volume and broke through resistance at 3. It now appears ready to
test the year's high at 4 3/4. Volume in mid-November rose dramatically, as
the MACD (Moving Average Convergence/Divergence) also rose from neutral to
.45, underscoring the accumulation that's taking place. With the stock's
short trading history, these new holders are likely to become "strong"
holders, forming a foundation for a sizable move. Once past resistance at 4
1/2-4 3/4, the stock can be expected to move to the $6 range before
consolidating.
Taking in to consideration the continual growth - 100% increase in
sequential revenue - and a cutting-edge product, MDTK becomes a solid
player within the healthcare industry. On Nov. 19th the company reported a
gross profit margin increase of 33% and also noted the reduction of
operating expenses as a percentage of sales by an impressive 25%. When
compared to the industry's recognized leader, HLTH, MDTK becomes a very
attractive buy. HLTH recently has traded at the $40 + level while reporting
sales of around $57 million and a huge loss of $ 63 million - an incredible
51 times price to sales. MDTK estimates sales for 12 months to be around $
40 million putting it at a bargain basement 2.2 times its price to sales.
Add into the mix several new agreements - including the 10-year deal with
University Affiliates IPA - and the recipe for success is set. The company
also adds the asset of other industry divisions such as Relay Systems - a
$22 million cash pot - to boost the revenue potential to a very attractive
level. All the ingredients are there, a great story, an excellent and very
competitive product, and strong management.
MDTK is a hold for any portfolio that wants to include second generation
web plays. We recommend accumulation up to the $4.75 - 5 levels. Based on
estimated sales of $100 million and a price-to-sales multiple of 5, a
target price of $ 10.00 seems reasonable. Also, based on a P/E ratio of 35
on after tax earnings of $ 13 million, or EPS of 25c, we come up with a
lower price-target of $8.50. Therefore, our target price for MDTK for
mid-2000 is in the $8.50-10.00 range. We urge you to average up once the
stock breaks out past $5.
Patrick Comer
The Insider, Inc.
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