In early trade the Pro Medicus Limited (ASX: PME) share price has been amongst the biggest movers and raced almost 4% higher to a new all-time high of $7.18.
This brings the leading health imaging IT provider's year-to-date return to an impressive 51%.
Why are its shares higher?
This morning Pro Medicus announced that its wholly owned U.S. subsidiary, Visage Imaging, has signed a seven-year contract with Yale New Haven Health.
According to the release, the contract will see Pro Medicus' Visage 7 technology implemented across all of Yale's radiology departments and integrated to their electronic health records for imaging results.
The implementation will span across five hospitals, as well as numerous additional imaging locations across the state of Connecticut. The first locations are scheduled to go live early in the second-half of FY 2017, with the remainder to be rolled out over a six-month period.
Management estimates that the deal will be worth over A$18 million to the company over the seven years.
Pro Medicus' CEO Dr Sam Hupert sees this as a major milestone for the company. He stated that:
"Yale is one of the top academic institutions in the US and its' medical school is renowned. Their decision further validates our belief that Visage 7 is uniquely positioned to cater to the needs of the most sophisticated and demanding clinical environments."
Should you invest?
Due to the quality of its product and the strong demand it is experiencing, I think Pro Medicus is up there with Nanosonics Ltd. (ASX: NAN) as one of the best mid-cap healthcare shares on the Australian share market.
However, its shares are a little expensive at almost 80x trailing earnings. This does make an investment a reasonably high risk one.
Because of this, I would suggest investors wait to see if profit-taking drives its shares a little lower over the coming months. If it does, I would try and get in at close to the $6.00 mark if possible.
