| Company name | HMS Holdings Corp. |
| Stock ticker | HMSY |
| Live stock price | [stckqut]HMSY[/stckqut] |
| P/E compared to competitors | Fair |
MANAGEMENT EXECUTION
| Employee productivity | Poor |
| Sales growth | Good |
| EPS growth | Good |
| P/E growth | Good |
| EBIT growth | Good |
ANALYSIS
| Confident Investor Rating | Good |
| Target stock price (TWCA growth scenario) | $35.98 |
| Target stock price (averages with growth) | $52.57 |
| Target stock price (averages with no growth) | $37.99 |
| Target stock price (manual assumptions) | $35.63 |
The following company description is from Google Finance: http://www.google.com/finance?q=hmsy
HMS Holdings Corp. (HMS) provides cost containment services to Government and private healthcare payers and sponsors. Its services ensure that healthcare claims are paid correctly, and its coordination of benefits services ensure that they are paid by the responsible party. Together, these services help clients recover amounts from liable third parties; prevent future improper payments; reduce fraud, waste and abuse; and ensure regulatory compliance. Its clients are the Centers for Medicare & Medicaid Services (CMS); state Medicaid agencies; commercial health plans, including Medicaid managed care, Medicare Advantage, and group health lines of business; government and private employers; Pharmacy Benefit Managers (PBMs); child support agencies; the Veterans Health Administration (VHA); and other healthcare payers and sponsors. In December 2012, the Company acquired the assets and liabilities of MRM, which provides Workers’ Compensation recovery services for commercial health plans.
Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in this stock.
If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.
As a former employee, you might want to take note of two facts if you are thinking of investing in the stock:
1) Sales growth is likely to hit a cannibalization point as states hand off their Medicaid programs to HMO administrators. The HMO’s do not purchase as many services as the states do, which will lower future revenue.
2) A great many of the companies best employees, including several VP’s and dozens of people with years of experience, started bailing out late last year and it continues through this year. Saying the employee productivity is low is an insult to the word low, wages for most workers below the executive level are 15% to 25% off from industry averages according to Glassdoor. This will also affect long-term sales.