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Technology Stocks : HCIA - dropped 27 today? Tomorrow's outlook!!! -- Ignore unavailable to you. Want to Upgrade?

To: Steve Rafalo who wrote (125)	10/22/1997 7:47:00 PM
From: Thomas C. White	Respond to of 226

If you're looking at this sector, my recommendation is to stick with companies that have well established revenue patterns. Probably the best of these are HBOC (the "gold standard" in HCIS) and National Data (NDC). NDC is the leader in health care transaction processing and is moving slowly into directly related areas in the HCIS business -- that is, they are incrementally approaching HCIS supported by their existing business in transaction processing. NDC is not so well recognized in the health care field because they started as a "merchant processor" in credit card transaction processing and have slowly moved into the health care field. NDC is actually my largest single stock position. HCIA is clearly having some problems in moving its DBMS systems into customers. It's a high-risk/high reward play. Sometimes I think that a lot of the second-tier HCIS vendors are "under-capitalized" in terms of their sales forces, typically I think the people who start these companies don't understand the sell-through process and the difficulties it creates. A lot of them don't have bread and butter products that they can make a living on while they try to sell these big complex systems. This can lead to very unbalanced revenue patterns and erratic EPS.