Tuesday, March 1, 2011

MedAssets, Inc. (NASDAQ: MDAS) Q2 2011 Price Target

Recent price: 14.35$
P/E Ratio: -
3 Months Target Price: 18.50$

Company Description
According to their IR website, MedAssets, Inc. provides technology-enabled products and services. These solutions are designed to improve operating margin and cash flow for hospitals and health systems. The Company’s technology-enabled solutions are delivered primarily through company-hosted software, or software as a service (SaaS), supported by enterprise-wide sales, account management, implementation services and consulting. Its customer base includes over 125 health systems and, including those that are part of its health system customers, more than 3,300 acute care hospitals and more than 40,000 ancillary or non-acute provider locations. The Company operates through two segments: Revenue Cycle Management (RCM) and Spend Management (SM).

MedAssets currently serves more than 180 health systems, 4,000 hospitals and 75,000 non-acute healthcare providers. Their revenue cycle and spend management solutions deliver measurable and sustainable financial improvement by increasing operating margins and cash flow for hospitals, health systems and other non-acute healthcare providers.

Confidence Margins
Strong resistance $21.44 (+49%)
Light resistance $18.68 (+30%)
Light support $13.88 (-3%)
Strong support $10.00 (-30%)

This is one of those companies that showcased poor financial results in their last quarter of 2010. The company is on a mission to reduce it's long term debt and the improvements will inevitably manifest in the coming quarters.

Entry strategy
For the cautious investor:
Buy the stock for 14.75$ or less but stay informed for coming developments and most importantly, the light support if the stock comes to pass across it.

For the risk-taking trader:
A position in the June 2011 15$ out of the money call option will yield a satisfactory return to investors, they can be acquired for about 115$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 18.50$, or keep it until 21.00$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 18.50$, 21.00$ if you are more bullish. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

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