4-Star Stocks Poised to Pop: Quality Systems

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, medical records software maker Quality Systems (Nasdaq: QSII  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Quality Systems and see what CAPS investors are saying about the stock right now.

Quality Systems facts

Headquarters (founded) Irvine, Calif. (1974)
Market Cap $1.0 billion
Industry Health care technology
Trailing-12-Month Revenue $447.7 million
Management CEO Steven Plochocki (since 2008)
CFO Paul Holt (since 2000)
Return on Equity (average, past 3 years) 28.3%
Cash / Debt $134.9 million / $0
Dividend Yield 4%
Competitors Allscripts Healthcare Solutions

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 2,219 members who have rated Quality Systems believe the stock will outperform the S&P 500 going forward.  

Just last month, one of those Fools, All-Star BuffettJunior1, tapped Quality Systems as a particularly attractive bargain opportunity:

This is an outstanding business trading at an extremely low valuation. The company operates in an industry that will continue to grow at a rapid rate over the next couple of decades. While I may not know what will happen over the next few quarters, over the long run well positioned companies in this industry (such as QSII) will almost certainly do very well. This is one of the rare stocks that I would give an A rating to.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Quality Systems may not be your top choice.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Quality Systems and McKesson. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (3) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 29, 2012, at 12:14 PM, EnigmaDude wrote:

    Be very careful about making investment decisions based purely on what appears to be a good value - in this case I would call it a "value trap". Senior level execs have been resigning and there must be a reason why they are leaving.

  • Report this Comment On August 29, 2012, at 3:54 PM, foorpool wrote:

    It's too late... my investment in QSII has been circling the drain for a while. Don't know whether to bail before I lose more or hang in there.

  • Report this Comment On August 29, 2012, at 8:59 PM, Paladin306 wrote:


    You may already know this but, a stocks current price tells us very little about what it's worth. Stocks are no different than other items of value. If you had a car that you KNEW was worth $20,000 would you sell it to me if I offered you $10,000? (If so, please see me after class, LOL). In the same vein just because Mr. Market is offering us $17.50, tells us very little about what it's worth. So, the key to investing, is having a solid idea about what a stock is worth. Whether you develop that through the Fool, or some other service or your own spreadsheet or break out the ole pencil and paper is your choice. But, before you buy more, or sell what you have I would challenge you to find out what QSII (and all your holdings), are actually worth. Then you'll have a much better idea of whether you need to buy, hold or sell.


    who is holding onto his QSII and will probably accept additional shares through puts he has sold.

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Quality Systems CAPS Rating: ****