Streamline Health (STRM – current price: $1.83) is a healthcare information technology company that focuses on document management solutions.
What Has Changed Here?
There are two major changes, one macro and one micro, that could help STRM over the next few years.

Firstly, on the macro side, the US healthcare information technology (HIT) market in general, should benefit greatly from the renewed focus on Electronic Medical Records, following the The American Recovery and Reinvestment Act of 2009 (“Stimulus Bill” or “ARRA”) which was signed into law by President Barack Obama on February 17, 2009. The Act allocated approximately $19 billion for health information technology investment. STRM’s solutions are an important aspect of any major investments in EMR systems, helping healthcare providers meet the provisions of the Act and move towards a more complete EMR.

On the micro front, STRM has also seen a shift in top executive management over the last few months. Most importantly, the company replaced it’s long-time CEO in January 2011. STRM’s new CEO is Robert Watson. Mr. Watson is a successful healthcare technology entrepreneur, who sold his last company, DocuSys, Inc., a leading provider of anesthesia information systems, to Merge Healthcare Incorporated (MRGE) in March 2010. As readers of this website are aware, I am quite familiar with MRGE and their management team, and place great value on their insights in the technology space. Mr. Watson’s connection to the team MRGE, as well as his sale of his former company to MRGE, speaks highly of skill as an entrepreneur, and his potential for deal making once he gets STRM on a stronger financial footing.

What Could Happen Here?
Despite STRM’s position in what is a very hot technology market, the company has basically been a “sleeper” for many years. I think that sleepy status is about to change with the appointment of Mr. Watson, who appears to be an aggressive entrepreneur with the experience and business connections that are necessary to fully realize STRM’s growth potential. As demand for EMR and healthcare technology grows over the coming years, I would expect STRM to capture more deal flow, and for the company’s revenue to experience dramatic growth. As the company’s financial picture improves, and more investors recognize the growth potential for STRM, the shares could see significant upside.

Disclosure: Affiliates of Envoy Global Research, and its principals, own shares in STRM. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.