CERN

Cerner Corporation supplies healthcare information technology (HIT) solutions, healthcare devices and other services designed to optimize healthcare organizations with solutions focused on eliminating medical errors, variability, and waste along the healthcare value chain. CERN’s business is conducted globally (North and South America, Europe, the Middle East, and Asia Pacific) with a customer base of more than 8,500 facilities, which include hospitals, doctor practices, ambulance centers, home health facilities and retail pharmacies. The HITECH Act portion of the 2009 Stimulus Bill will serve to propel the trend for seamless connectivity of individual electronic health records (EHR) in the U.S. because it provides incentives for hospitals and doctors’ offices to implement HIT systems over the next few years. CERN’s backlog recently jumped 21% to $4.3 billion in Q1 10, which represents more than 2x expected annual sales in 2010. About one-third of the backlog is expected to be recognized as sales in 2010. The majority of the backlog reflects new business booking and provides good visibility into CERN’s sales strength. We believe CERN’s shares are attractively priced.

The chart below is an illustration of how good of a job the management team for Cerner Corporation has done at creating wealth for its shareholders. The market rewards companies that follow a wealth creation strategy of growing a profitable business. In other words, the market favors companies that generate positive Economic Margins (true measure of economic profitability) and are capable of expanding their business. The example we are providing today Cerner Corporation (NASDAQ:CERN) has maintained positive Economic Margins for over the last 10 years, and has consistently grown their asset base during the same time period. Looking at the Cumulative Return vs. S&P500 chart in the Wealth Creation Report, it is not surprising that Cerner Corporation (NASDAQ:CERN) has outperformed the market over this time period.

The Applied Finance Group (AFG), an independent equity research firm, would like to invite professional investors/money managers to participate in AFG’s Market Forecast Project (MFP). The MFP is a professional investor sentiment survey designed to help money managers make more informed investment decisions, enhance client communication and provide an edge in the portfolio construction process. The main focus of the MFP is to provide participants investment ideas, macro-economic sentiment and stock market predictions of a large and diverse group of investment professionals to see how other professional money managers in the industry view the market.

In yesterdays article we provided an update of the performance of our annual HOT STOCK LIST:

We also provided an update of the performance of the Toreador Large Cap Fund, TORLX which uses AFG’s Economic Margin Framework as part of its investment philosophy.

As you may note, both have done very well!

Today we decided to provide a Buy/Sell list to VE’s registered visitors applying some of these same investment principles: Economic Margin, Management Quality, and a company's Percent to Target (the deviation between a stock's current trading price and its current default target price according to AFG).

Below is a preview of the list which includes a Buy/Sell Recommendation on each Stock. The complete list, accessible to Value Expectations registered users, contains around 500 Stocks.

S&P 500 Rank (Preview) - August 11th 2009
Ticker	Company	Price	Recommendation
DRI	DARDEN RESTAURANTS	32.61	Strong Buy
KR	KROGER CO THE	20.93	Strong Buy
WLP	WELLPOINT INC	51.9	Strong Buy
AOC	AON CORP	40.55	Buy
FLR	FLUOR CORP	57.49	Buy
PCG	PG&E CORP	40.36	Buy
AMT	AMERICAN TOWER CORP	32.37	Neutral
IRM	IRON MOUNTAIN INC	28.85	Neutral
NOV	NATIONAL OILWELL VARCO	37.1	Neutral
BEN	FRANKLIN RESOURCES INC	92.13	Sell
EXPD	EXPEDITORS INTL WASH INC	33.04	Sell
QCOM	QUALCOMM INC	45.74	Sell
JDSU	JDS UNIPHASE CORP	5.93	Strong Sell
MWW	MONSTER WORLDWIDE INC	14.9	Strong Sell
NYT	NEW YORK TIMES	8.1	Strong Sell

Source: The Applied FInance Group

To download the complete list click here.

Every June, The Applied Finance Group (AFG) hosts its annual conference in Las Vegas to help its clients improve their understanding of AFG’s methodology and valuation framework. Putting these concepts into practice, AFG also provides several actionable Buy ideas that clients can add to their portfolio, upon returning to their office. One of the most popular sessions during the conference is called “Hot Stocks”- a time when AFG analysts give detailed analysis of several stocks that are currently of great interest to the investment community. Since its release on June 12, 2009, the “Hot Stocks” portfolio has outperformed the Russell 1000 by 5.85%. Below is a look at the four Buy recommendations within the “Hot Stocks” portfolio, and their performances as of August 13th 2009. Also provided below is the performance of the Russell 1000 index during the same time period.

Tomorrow Value Expectations will be issuing a ranking of the entire S&P 500 to registered Valueexpectations.com users. Register now to ensure that you receive this article.

Additionally Toreador's Large Cap Fund (TORLX) which uses AFG's Economic Margin Framework as part of its investment philosophy has recently crossed it's 3 year track record threshold, Click here to view  TORLX performance.