Bio-Reference Labs Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of lab testing services specialist Bio-Reference Laboratories (Nasdaq: BRLI  ) surged 11% out of today's trading gate after it posted better-than-expected quarterly results.

So what: Driven by a solid 25% increase in revenue, Bio-Reference posted second-quarter earnings of $0.26 per share, versus the average analyst estimate of $0.24 per share. If your initial reaction is that a $0.02 earnings beat doesn't exactly justify a double-digit price rally, Mr. Market has already come around to your way of thinking. Since the opening spike, the shares have quickly sold off and are now up only 2.4% at the time of this writing.

Now what: I'd take this midday price weakness as a tempting buy-in point. Given the strong operating momentum (patients serviced increased 25%, as well) and demographic tailwinds working in its favor, Bio-Reference seems like a good bet to keep delivering solid top- and bottom-line growth in the foreseeable future. More importantly, with a PEG ratio in line with larger rivals LabCorp (NYSE: LH  ) and Quest Diagnostics (NYSE: DGX  ) , that bet seems like a reasonably priced one.

Interested in more info on Bio-Reference? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Bio-Reference. Motley Fool newsletter services have recommended buying shares of LabCorp and Quest. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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