Advanced digital signal processing has the potential to revolutionize the stethoscope through the use of mathematical algorithms to interpret heart sound acoustic information. In this study, a novel classification algorithm that does not require cardiac cycle segmentation was used for identifying differences between normal and diseased heart sounds. The heart sound signals were not separated into systole and diastole. A recordable electronic stethoscope was used to record the heart sounds of 163 echocardiogram patients. Mel-cepstrum and Principal Components Analysis were applied to the 60 recorded heart sounds and decision spaces were developed. The algorithm was tested using 100 novel patients. The specificity of the algorithm is 72.4% and the sensitivity is 63.4%.