Why Omnicell Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Omnicell (Nasdaq: OMCL  ) , which provides automated systems to help hospitals manage their medication supply, jumped as much as 12%, after reporting record third-quarter earnings results.

So what: For the quarter, thanks to its acquisition of MTS Technologies in May, and strong demand for its product, Omnicell was able to report an adjusted profit of $0.29 on a 12% rise in revenue, to $84.3 million --€“ both records. EPS absolutely crushed the $0.04 profit that Omnicell reported last year, and handily surpassed the $0.24 that analysts had been expecting. Revenue, however, did fall $3.3 million short of the Street's projections.

Now what: Omnicell has been making all the right moves lately: purchasing MTS, focusing on growing its international business, and strengthening its domestic business, as is evidenced by its partnership with Cerner (Nasdaq: CERN  ) regarding CareAware iBus. The Affordable Care Act will play right into Omnicell's hands, as greater numbers of patients being covered should lead to an increase in medication prescriptions and, thus, Omnicell's medication management solutions. Over the long-term, and even after today's pop, I can see Omnicell being a smart play.

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