Want to know who last left their scissors in a patient’s abdomen? Look no further: Health Grades, Inc. (Nasdaq: HGRD) is keeping track. And with increasing exposure expected when Google launches Google Health in early 2008, it will be that much easier to find Dr. Oopsie.

HealthGrades has a proprietary rating system for hospitals, nursing homes, home health agencies and physicians; data include whether doctors are board certified and whether they are free of state and federal sanctions. The Golden, Colo.-based company’s clients include hospitals, employers, benefits consulting firms, insurance companies and consumers, who surf its website to find quality ratings for 5,000 hospitals, 700,000 physicians and 1,600 nursing homes.

All well and good for consumers. But HealthGrades’ shares haven’t done much for investors since rallying to the $7 level in early 2006. They ended Thursday at $5.68 each, up 33% on the year, but still gyrating in a rough two-year range of $4 to $7.

Dictating trading is world-on-a-string Google Inc. (Nasdaq: GOOG), the $231 billion master puppeteer, who started talking about plans to introduce a health-care product in early 2006. And talking … and talking. Now, with Google’s latest schedule to launch Google Health in early 2008—analysts are expecting it as soon as February—HealthGrades just may bust through to new highs.

At least that’s what Jackson Spears, director of research at Capstone Investments, thinks. He’s carrying a “strong buy” on HealthGrades, with a price target of $10. The key: “What will the company look like in 2008?” Spears said in an interview with SmallCapInvestor.com.

For access to the full article, you must be a registered member - it's FREE.