This week, GlaxoSmithKline (NYSE: GSK) sold its 16.5% stake in Quest Diagnostics (NYSE: DGX). The pharma giant has owned shares of Quest since 1999 when Glaxo sold its clinical laboratories business to Quest.

Half of the sale was a buyback by Quest at $54.30, and the other half went in a public offering at $56.25. Shares are currently trading north of $58.

Is that a sign that you should sell shares, too? That depends; do you have somewhere else to invest the proceeds?

Glaxo certainly does. Its shares are fairly cheap, and a buyback could help its shareholders more than holding on to the shares of Quest.

I'm reminded of this video of Motley Fool co-founder David Gardner a few years ago talking about his sell signal. Essentially he sells when he finds a better investment than the one he's in right now. That might mean selling a winner or a loser, but the important thing is that he's always chasing higher returns.

Are there better returns out there than Quest? Maybe, but the risk-reward profile doesn't look too shabby at this point either. The company trades at 14.5 times earnings, a little cheaper than Laboratory Corporation of America (NYSE: LH) at 16.9. The two basically have a duopoly on the national diagnostics business, although there are some smaller players such as Bio-Reference Laboratories (Nasdaq: BRLI).

Lab Corp. has been growing faster, but that's mostly because it stole UnitedHealth Group's (NYSE: UNH) business away from Quest. Signing up other health insurers as preferred providers will help Quest's revenue growth, but most of the growth will come from the industry as a whole. As baby boomers grow older, the number of diagnostic tests they require will also increase. On top of that, medicine is getting more personalized and companion tests are required to determine whether an increasing number of drugs will work for a patient.

Follow Glaxo's lead if you have a better place to invest, but Quest still looks like a good long-term bet to me.

Buffett thinks this "picks and shovels" health-care company should profit, regardless of Congress' health-care reforms.