Among the biggest losers in Wednesday’s early trading are Allscripts (Nasdaq: MDRX), Nokia (NYSE: NOK) and CVS Caremark (NYSE: CVS).

Ignore the Noise, the Allscripts Deal is a Good One

A key factor behind runaway healthcare spending has been the mountains of time-consuming paperwork. As a patient’s records get passed from one doctor to another, or from a hospital to a nursing facility, data operators have always had to re-enter patient information into their own proprietary systems. In recent years, a push began to get doctors and others to start using the Internet to help establish uniform data entry practices. But doctors are notorious luddites, and change has been slow to come.

#-ad_banner-#The recent sweeping healthcare legislation aims to change all that by providing incentives to move patient records online, and a just-announced deal between Allscripts (Nasdaq: MDRX) and Eclipsys (Nasdaq: ECLP) is set to profit from that move. Allscripts has made major inroads with doctors, and now has nearly 200,000 physicians using its software. Eclipsys has focused on hospitals and healthcare facilities. By merging and establishing a unified technology platform, yet more steps will be removed from the laborious data entry process.

The deal establishes the combined entity as a clear industry leader, and should set the stage for strong growth in 2011 and 2012 as federal mandates kick in. The only question is whether the deal will invite anti-trust scrutiny. Despite the deal’s compelling synergies, investors are pushing Allscripts’ shares down -9% this morning, due in part to a complex unwinding of a relationship that Allscripts had with U.K.-based Mysis. Mysis had been a major shareholder and will need to conduct a secondary stock offering to unload its large position. And in this market, it’s anyone’s guess as to how demand for shares will fare.

Action to Take –> There are a lot of moving parts here and it’s unclear what sales and profits will look like during the next few years. So it’s hard to say what shares should be worth. But this is a great “story stock,” and will likely be a popular idea when investors gear up to profit from the new healthcare changes.

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Nokia loses Support

Though many tech stocks have been hit hard in this market rout, few have taken such a deep hit as cellphone maker Nokia (NYSE: NOK), which has fallen nearly -40% during the past six weeks. Shares are off another -4% this morning. In fact, shares trade for less than they did in 1998. Nokia reported weak first quarter results back in April, and since then, rivals such as HTC appear to be picking up momentum in the burgeoning market for iPhone-like devices. It doesn’t help that Nokia is heavily exposed to the weakening European market. Many investors have grumbled that the company has morphed from a technology leader into an also-ran, and suggest that bold action is required, either through acquisitions or further management shake-ups.

Action to Take –> Yet it’s hard to deny the real value that shares now represent, trading at about nine times next year’s profits. Then again, we’ve seen stocks such as Dell, Inc. (Nasdaq: DELL) trade at low multiples for quite some time while growth has been constrained. There’s no reason to jump into this stock now simply because it is cheap, but it is worth closely monitoring, as sentiment is very negative. You make money on stocks that start with negative sentiment when the sentiment starts to turn positive.

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CVS Caremark continues Lower on Pharmacy Benefits Management News

Following up on Monday’s news that Walgreen (NYSE: WAG) would no longer conduct any new business with CVS Caremark’s (NYSE: CVS) pharmacy benefits management (PBM) unit, CVS has advised Walgreen that it can take its business of existing customers elsewhere as well. Those customers will have to migrate over to another PBM in very short order. As we noted on Monday, MedcoHealth Solutions (NYSE: MHS), a rival PBM, may pick up the Walgreen business. The industry spat is not helping CVS and Walgreen, both of which have seen their shares fall another -2% today. In the past three sessions, shares of CVS Caremark have lost about -15% of their value, and shares now trade for about 12 times next year’s earnings. But those earnings may be revised lower. Walgreen represents 13% of all retail drug sales, and likely represents at least 3% to 4% of CVs’ total revenue streams.

Action to Take –> As a rival and partner to other drugstore chains, CVS Caremark is in a conflicted position. Those conflicts are starting to lead to lost business. Re-visit shares only if they fall down into the lower $20s.