I've done a little research into Athena Health and like what I see.

First, software is a sales driven business (or should be) and these guys hit up the doctors and administrators with what they care about most -- Billing, getting paid fast and knowing where you stand.

The system is completely web based which provides great opportunities for sharing information (reducing mistakes and saving money). A web based system is also a real benefit for sales demonstration purposes and reducing sales expenses. The company was founded in 1997. That's long enough for the company and product to be mature, but not so long that they are burdened with archaic legacy software and thinking.

The sector and timing is right. ATHN is worth watching.

RJ&A rates this a Market Perform due to the Huge PE ratio compared to their peers. Guesstimate is 37.8 X 2010. The analyst does not see any catalyst over the next 12 months either positive or negative. Technicals are 5 out of 5 positive with a huge $67 target. Stop loss would be the DB at $30 so you are risking $5. I see resistance at the DT $48.

If you're interested in fundamentals and valuation, both ATHN and its competitor QSII score low, with poor balance sheets and insider and short selling. I've done well with HMSY, but I'm using tight stops.

asafp, I'm not recommending HMSY at this point. Just pointing out that is has had a runup. Here is a link for insider transactions at ATHN: http://moneycentral.msn.com/investor/invsub/insider/trans.asp?Symbol=ATHN . A key source I use rates the insider transactions for ATHN as a negative factor. As always, it's always a matter of DYOD.

Check your E-mail in a few minutes. 43 pages of pure joy for a weekend read!! f 5

To that substantial list, I would add CPSI, which did very well for me a while ago. I'm looking at it again. I looked over this niche pretty closely when Obama first talked about improving medical records, and most of them have bottom line problems, so we're looking a lot at technicals and story. Some folks like Allscripts (MDRX), but I'm still on the fence. ATHN definitely has possibilities, but it's always good to be cautious with medical companies with less than beautiful balance sheets. Cerner is so-so for me, while Eclipsys has too many problems.

I know CPSI pretty well, and it has been a well run company, so I guess that would be my top choice in this group. Still haven't bought it, though.

Page 39 gives a breakdown of Software Development costs. Is that what you are looking for?

ATHN got a bump from govt incentives to computerize medical records along with MDRX.

Of the two companies, I like the ATHN approach better. Because it's web-based, they should have lower costs. MDRX seems to offer more of a data entry service for existing records and I'm guessing it's older software.

Like everything else, I'd consider ATHN a trade and not an investment.

"MedTech Sector Gains From Stimulus Plan"
http://biz.yahoo.com/ibd/090220/health.html?.v=1

I looked a little closer at ATHN vs. MDRX and QSII. Interestingly, all 3 have market caps around $1 billion. Look at the forward P/E and year founded.

ATHN 46.0 1997
MDRX 16.1 1986
QSII 19.7 1974

Only ATHN was founded in the internet era and has a p/e for a growth stock. The other two have to be considered "legacy" software companies and have a wider array of older software. Each of them has used what I consider to be a dirty trick of the software industry which is window dressing old software to look new. They've added web features which don't seem to really do much. They let patients sign on, make appointments and pay bills.

ATHN focuses mainly on the insurance billing and has software and people to make it work. This doesn't mean ATHN can't fail or the other two can't do well. It just means ATHN is the growth play more like GOOG or AAPL than MSFT.

ATHN earnings after market close.

Where did you find that information? There seems to be a difference of opinion about the P/E. I see 40.79 on MSN Money, 116.00 on Google Finance, 116.74 on Yahoo Finance.

Athena does have a nice website...

Thanks, shred.

Strange time for the earnings release (22:00)!

Thank you. (The AOL site listed 22:00.)

The earnings news initially caused the stock to rise, but it's down now.

Here's where fundamentals do come into play (see post 5). CPSI has fared much better.

too late maybe to help you with a decision to buy/sell - but here is schaefer investment research outlook on the stock (slightly dated)

"The company's flagship product is a software product called athenaCollector, which automates and manages billing-related functions and includes a medical practice management platform.

Founded in 1997, and with a market capitalization of $1.24 billion, ATHN definitely qualifies as a small-cap company. However, there are plenty of reasons why investors can expect big things from this modestly sized stock.

"The shares of ATHN are easily outperforming the broader equities market, having racked up a gain of 16.5% during the past 52 weeks. In fact, the stock has consistently bested the S&P 500 Index on a relative-strength basis since April 2008.

"More recently, ATHN has toppled short-term resistance from the 36 level, thanks in part to a technical boost from its rising 10-week and 20-week moving averages.

"The next potential obstacle for the shares lies well overhead in the round-number 40 region, which is the site of the stock's annual high.

"While this looming resistance could provide a challenge for the stock during the short term, ATHN could potentially benefit as more and more Wall Street players are drawn to its bullish bandwagon.

"For example, Zacks reports that 6 of the 11 analysts currently following the stock consider it worthy of just a lukewarm "hold" rating. Any upgrades from this skeptical bunch could draw new buying pressure to the shares.

"Additionally, the equity could be overdue for some price-target increases. Thomson Financial calculates ATHN's average 12-month price target as $36.88. Any upward revisions to this consensus estimate could also provide a boost.

"Elsewhere, option traders have grown more pessimistic as the stock has climbed. Short sellers have also accumulated a sizable pessimistic position.

"Short interest accounts for 13.3% of the equity's available float, or 7.8 times its average daily trading volume. If these skeptics are spooked into buying back their bearish bets, it could help ATHN extend its recent uptrend.


"While the stock may endure a short-term rejection at 40, the contrarian backdrop suggests that ATHN has plenty of sideline buying power available to push it higher in the coming months.

"As the doubters on Wall Street gradually capitulate to the equity's strength, it should continue to outperform the broader market."

Company is increasing it's customer base and spending on R&D. Worth keeping an eye on.

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Athenahealth edges higher after Friday plunge

(AP:NEW YORK) Shares of athenahealth Inc. made a modest recovery Monday, but analysts continued to reduce their expectations for 2009 based on medical software maker's plan to invest more money in its business this year.

The Watertown, Mass., company said Thursday its operating expenses will increase in the first half of the year as it wraps up enhancements to client service organizations. Athenahealth also plans to increase product development works, leading to greater research and development costs, and said it will make bigger investments in sales and marketing to attract new clients.

The spending will lead to a "pause" in profit margin growth, athenahealth said. The company also said it will change the way it calculates its taxes. In Friday trading, the stock plunged 25.4 percent. It rebounded 78 cents, or 3.1 percent, to $26.28 in Monday afternoon trading.

In a note to clients, Stifel Nicolaus analyst Todd Weller cut his profit estimate to 49 cents per share from 80 cents per share.

"The net of these two factors is a significant reduction to the 2009 earnings per share outlook for a high flying growth stock in which beat and raises are typically required," Weller said. He said the stock was oversold Friday and kept a "Hold" rating.

Thomas Weisel Partners analyst Steven Halper lowered his profit estimate to 55 cents per share from 89. However, only 5 cents per share came from athenahealth's planned investments; the rest came from the adjustment in its tax calculations.

The analysts were pleased by the company's fourth-quarter results, which exceeded Wall Street estimates. Athenahealth said its profit jumped to $20.6 million, or 60 cents per share, from $2.1 million, or 6 cents per share a year earlier. Revenue grew 47 percent, to $41.4 million from $28.2 million.

Excluding a $16.7 million tax benefit and other one-time items, the company said it earned 19 cents per share.

Analysts had expected a profit of 17 cents per share and $40.1 million in revenue, on average.

The company said business service revenue rose 50 percent, to $39.7 million. At the end of the quarter, 12,589 active physicians were using athenahealth products, an increased of 33 percent from a year ago. The company's products were being used by 18,785 active medical providers, a gain of 50 percent.

The insider selling does not bother me because of the number of shares held by the officers is large. They may sell to fund college tuition etc. I don't own any shares but his company is worth watching and possibly accumulating on dips. Being internet based is a big plus IMHO because they are selling a service not equipment. dharouff, thanks for the link in the previous post. There is going to be a scramble for the stimulus $$$ but ATHN looks like it could benefit. There will be more than one player.