Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, medical lab operator Laboratory Corp. of America (NYSE: LH ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at LabCorp's business, and see what CAPS investors are saying about the stock right now.
LabCorp facts
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Headquarters (founded)
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Burlington, N.C. (1971)
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Market Cap
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$6.67 billion
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Industry
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Health-Care Services
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TTM Revenue
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$4.56 billion
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Management
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President/CEO David King (since 2007)
CFO William Hayes (since 2005)
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Return on Equity (average, last three years)
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26.3%
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Competitors
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Quest Diagnostics (NYSE: DGX )
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CAPS members bullish on LH also bullish on
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Johnson & Johnson (NYSE: JNJ )
General Electric (NYSE: GE )
Apple (Nasdaq: AAPL )
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CAPS members bearish on LH also bearish on
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IBM (NYSE: IBM )
Research In Motion (Nasdaq: RIMM )
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 489 of the 505 members who have rated LabCorp -- some 97% -- believe the stock will outperform the S&P 500 going forward. These bulls include All-Star healthcarevalue, who is ranked in the top 10% of our community, and athenamike.
Last month, LabCorp seemed to pass several of healthcarevalue's tests for value:
Price/earnings 14.65, Minimal to no long-term debt & low debt/equity of near zero, and focus on lab testing, both routine diagnosis testing and specialty testing services -- should prove to be a good niche market going forward.
In a pitch from two days later, athenamike conducted a follow-up:
LabCorp is building scale and increasing returns on capital over time -- what's not to like. Medical lab testing is growing, it's a relatively small medical expense, it can dramatically improve medical outcomes, and it is becoming an oligopoly between Quest Diagnostics and LabCorp. All this leads to me to predict 15% returns on equity and high growth for quite some time, which should turn into excellent returns over time.
What do you think about LabCorp, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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