Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, medical transcription specialist Transcend Services (Nasdaq: TRCR ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Transcend's business and see what CAPS investors are saying about the stock right now.
Transcend facts
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Headquarters (Founded)
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Atlanta (1976)
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Market Cap
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$154.7 million
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Industry
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Health-care technology
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Trailing-12-Month Revenue
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$84.28 million
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Management
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CEO Larry Gerdes (since 1993)
CFO Lance Cornell (since 2005)
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Return on Equity (Average, Past 3 Years)
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38.3%
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Cash/Debt
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$27.74 million / $2.07 million
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Competitors
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MedQuist (Nasdaq: MEDQ )
3M (NYSE: MMM )
Nuance Communications (Nasdaq: NUAN )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 96% of the 93 members who have rated Transcend believe the stock will outperform the S&P 500 going forward. These bulls include All-Star Popnfresh100, who is ranked in the top 5% of our community, and shornsby63.
A few months ago, Popnfresh100 tapped Transcend as a healthy opportunity:
Medical transcription companies are paid by the line, right? New health care plan = more health care data = more lines of transcription. That's the world's easiest form of growth. Transcend is number two in the industry by market size, but they have better margins than [MedQuist] and have been picking up market share.
Not only does Transcend sport higher operating margins than its largest competitor, MedQuist, but it also tops those of its fiercest technology foe, Nuance Communications. Of course, companies that license transcription platforms to health-care providers can be both partners and competitors of Transcend. For example, a key part of Transcend's growth strategy is to actively pursue new business on Nuance's eScription platform, as well as on 3M's ChartScript. With health-care providers looking for more and more ways to cut costs, CAPS members like shornsby63 think Transcend is in a perfect position to cash in:
From a business perspective, they are in a sweet spot. Health care costs in the US will need to be addressed -- both republicans and democrats can agree on that. They can also agree that bringing down the cost of health care is key to any solution. [Transcend] is in the business of eliminating overhead for physicians and hospital. ... Look for them to outpace their [five-year] 17% growth outlook going forward.
What do you think about Transcend, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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