Department of Veterans Affairs announced a $10 billion, ten-year contract with health technology provider Cerner Corp. (NASDAQ: CERN – $61.34) for the VA to use off-the-shelf Cerner solutions to deliver veterans, transitioning service members and their care providers access to their medical history through a single electronic health record system. Using technology that has been deployed successfully at Department of Defense medical facilities and thousands of provider sites globally, Cerner plans to provide seamless care across the VA’s high-performing integrated network, including VA facilities, community providers and DoD facilities.
Support for this quality stock softened in the wake of the December and May earnings reports. Nonetheless, I continue to like Cerner for the long haul. Fiscal 2018 earnings should settle at $2.49 per share and Street expectations are for $2.82 next year. Hence valuations at current levels are reasonable given the company’s strong growth potential.