June 7, 2012
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 ) sank 10% on Thursday after its quarterly results disappointed Wall Street.
So what: Bio-Reference's second-quarter results were actually in line with estimates -- EPS of $0.33 on revenue of $163.4 million versus the consensus of $0.32 and $161 million -- but given the stock's run-up over the past six months, it's clear that investors were expecting more. Expectations aside, however, management generated more revenue while improving margins, so Bio-Reference seems to have some decent operating momentum working in its favor.
Now what: I'd look into this plunge as a possible buy-in opportunity. "We continue to be paced by esoteric growth, but we have also been able to expand routine clinical testing into those same physician offices and have been able to achieve a more stable position in the physicians' offices," said CEO Dr. Marc Grodman. "Our sales force is continually infused with energy by our new offerings and we expect to leverage that energy into continued expansion around the country." With the stock down about 20% from its 52-week high and trading at a forward P/E of 11.5, now might be a good time to get in on that growth.
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