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Leading healthcare information technology solutions provider Cerner Corporation (CERN - Analyst Report) recently reported that its board of directors has decided to implement a 2 for 1 stock split through a 100% stock dividend. The decision took take place at a meeting of the board on May 24, 2013.

Cerner had about 172.3 million common stock shares on May 24, 2013. The split will increase its share count to about 344.6 million shares. Every shareholder as of June 17, 2013 will receive an extra share for each share held as of this date. The date for distribution of the new shares will be around June 28, 2013.

Cerner remains the trend setter among pure-play, publicly traded healthcare information technology vendors. The company is diversified not only on a global basis but serves both hospitals and ambulatory outfits. Its integrated solutions have captured market share. While fresh opportunities are shrinking, the replacement market is growing.

We believe long-term investors may consider Cerner, which serves a sizeable installed inpatient base that requires composite clinically-oriented applications complying with “meaningful use” requirements, reimbursement problems and complicated coding issues. The company has long-standing, integrated and seamless solutions for both inpatient and ambulatory settings.

On the negative side, the federal Stimulus program will gradually have to wind down. Cerner faces stiff competition from established HCIT players, such as Athenahealth, Inc. (ATHN - Analyst Report).

Cerner offerings are used by about 10,000 health care entities worldwide. This count includes over 45,000 doctors, 2,700 hospitals and 4,150 physician practices.

We currently have a Zacks Rank #3 (Hold) on Cerner. However, we are more positive about other stocks such as Merge Healthcare Incorporated (MRGE - Analyst Report) and Omnicell Inc. (OMCL - Analyst Report) both of which carry a Zacks Rank #2 (Buy) and are expected to do well. 

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