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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Graham Osborn who wrote (55926)	8/21/2015 11:53:52 PM
From: E_K_S	Respond to of 78652

Re: QSII All good points. I think the key is if/when their revenues will start growing AFTER the integration of their recent acquisition. There was some overlap in their customers but also quite a few new ones that can/should be converted to their new 'cloud' platform. They also changed the way they bill service revenues (no longer a hardware component model) and the focus is on a subscription fee basis. I suspect this will give them more flexibility w/ their larger customers especially one's that have Medicare reimbursement constraints. Finally, there is always the legacy hardware supplier that may need a way to enter this software/cloud space with their own branded service. I was thinking someone like a GE could easily package QSII's cloud services software w/ every one of their imaging products sold and/or leased. It could be some large OEM partnership agreement/license that may/could eventually result in their acquisition. The new CEO for QSII, Rusty Frantz (formerly senior vice president and general manager of Dispensing Technologies at CareFusion) helped grow their global revenue to over $1bln. CareFusion was sold to Becton, Dickinson in March 2015 for $12.2Bln. It's nice to see the buying in QSII this week when most every other stock was selling off. Here you get a 'potential' GARP stock, pays an attractive dividend, has no debt, and has positive FCF (P/CF=11.6, I typically want this below 10 as long as revenues can grow high single or double digits). It's pretty impressive that QSII can still maintain their FCF even as they transition their revenue streams to a cloud subscription service from traditional hardware software license/fee model. This one will become much more interesting when their Cashflow/share exceeds $2.00 and begins to grow as their subscriber base grows. Once that happens, you will be paying a lot more and who knows as the sector consolidates they may be taken out by a very large Medical Service OEM like Becton Dickinson, GE Healthcare or Hitachi Medical Systems. EKS