Quest Diagnostics, Inc. (NYSE:DGX)
A provider of diagnostic testing, information and services, providing insights that enable physicians and other healthcare professionals to make decisions to improve health.
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Recent Overreaction
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Good sector--strong growth.
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Long-term value play
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It has been too beaten up. We are all getting older so we need these guys.
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#2 use of CAPS
Punished by market by 18% for losing 7% of the next year revenue
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Dog Star Theory from Jim Jubak
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good buy right now.
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they did the right thing, accepting the UNH bid would have been a bigger burden than if they just let it go...their competitor will be drained by UNH and is trading at a premium to the DGX
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An ageing population in combo with more standardized lab testing for many medical diagnostics
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Baby boomer population is getting old and I expect the lab testing to increase in the future (with Quest being the top dog)...I bought this in early Oct 2006 when there was a major drop in price (over 10%) with the news of the loss of the UnitedHealthcare contract. Hoping I bought low and will reap the benefits.
Recs
DGX has a trailing PE of 22.3. That is a little higher than its average PE over the past year but not outrageous. It pays a dividend of 40 cents. It is the largest company of its type so it has economies of scale. It is in a relatively "safe" medical industry. People need to be tested for certain medical situations. With people living longer and the baby boomers getting older, this company should continue to do well for at least 5 years. It will probably do will for 10 plus years.
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