There's major turmoil in the health care software space tonight and a major opportunity: Cerner (CERN). Now the stock will be up tomorrow because, as is so typical, this tremendous performer, which has saved health care institutions' fortunes with its software, reported a terrific earnings beat and boosted its forecast.
I don't care.
I think you should buy it anyway. That's because Cerner's closest competitor, Allscripts (MDRX), is in complete disarray, almost cut in half, because of severe accounting issues and a dramatic shortfall. These two companies go head to head in a lot of contracts, many of them long term that can't be broken, but I have to believe that this scandal at Allscripts is going to knock the company out of the competition with Cerner. After the bell, the chairman, the CFO and three board members abandoned ship. The numbers were revised down sharply. The company reported half the earnings the Street was looking for.
It's a total disaster.
I have had the Allscripts CEO, Glen Tullman, on "Mad Money" many times, until the last quarter, which I found to be a deceleration in growth. Not long after that, I stuck Allscripts into the "sell block," because I thought that Cerner offered a more competitive suite of software.
Well, Cerner does. And even if it is up 5% at the opening, I would still buy some. That's how much of a bombshell this is for Cerner's chief competition. I don't know if this one's coming back anytime soon. If at all.