Buy -- Price 40.15 on July 7
by Jefferies & Co.

We're raising our target to 48, which is 30 to 35 times our "10 [pro forma] EPS estimate of $1.47, roughly in-line with HMSY's historical two-year price/earnings average multiple. Considering current economic conditions, we remain upbeat on the potential for upward earnings revisions. HMS aids government health-care programs in their efforts to increase revenue and reduce operating and administrative costs. HMs' cost-containment and payment-accuracy services are offered through its two wholly owned subsidiaries, Health Management Systems and Reimbursement Services Group. HMS provides cost-recovery services to government payers; its customers include Medicaid programs, Medicaid managed-care plans, child-support agencies, state prescription-drug plans ... [etc.] RSG provides Medicare-reimbursement services to public and private hospitals ... . A new, competitively won Mississippi contract (about $1 million to $2 million fully ramped-up) validates [the] favorable business environment for HMSY. Momentum appears to be continuing [for] 2009. Market cap: $1 billion.

GROWTH AND PROFITS

2

One of only a few companies in the country doing what it does. Small cap stock, great future

health c are

~3.07 Article MentioningIts30%RewardForMedicalCostSavings=ItsPayment