MedAssets Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of hospital software provider MedAssets (NAS: MDAS) were raising the roof today, gaining as much as 14% in intraday trading after Wall Street firm Raymond James upgraded the stock from "outperform" to "strong buy."

So what: There's nothing too complicated about this story -- Raymond James shouted "buy" and investors are doing as told. The brokerage house said the valuation on MedAssets' stock looks good and slapped a $15 price target on it.

Now what: Wall Street recommendations like this can be a good reason to take a closer look at a stock, but they're never reason enough alone to hit the buy button. Based on current expectations for 2011 earnings, MedAssets' stock trades at an attractive price-to-earnings ratio of 11.5. However, investors will want to make sure that they're comfortable with the company's debt-laden balance sheet and the extent to which it has relied on acquisitions for growth.

Want to keep up to date on MedAssets? Add it to your watchlist.

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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