Exact Sciences (Nasdaq: EXAS) Cologuard isn't as precise as the developer's name would imply, but it looks to be good enough to get the job done.

The non-invasive colorectal cancer test detected 64% of samples from patients with pre-cancer polyps, and 85% of cancers in stool samples. The test looks for altered DNA from cancer cells that get shed into the stool.

That's probably not as good as a colonoscopy, but it provides a good alternative for the 40% of people over the age of 50 who should get a colonoscopy, but don't because ... well ... let's just say I hear they aren't much fun.

The test had a specificity of 88%; in short, 12% of the samples it called positive didn't actually have a sign of cancer. Again, that's not 100% exact, but since the patients with false positives would just go on to get an uncomfortable-but-generally-safe colonoscopy to confirm the test, a false positive rate in that range is more than acceptable.

How well could Cologuard sell? There's no real competition, and insurance companies UnitedHealth Group (NYSE: UNH), Humana (NYSE: HUM), and Aetna (NYSE: AET) would gladly pay for the test rather than have to pay for costly treatments if the colorectal cancer goes undetected. The limiting factor is probably getting people to take a stool test. While not many people over the age of two like playing with poop, patients may be willing to do it if they can avoid a colonoscopy.

But we're getting a little ahead of ourselves. Exact Sciences still has to run a clinical trial to confirm the results. These results came from frozen samples of well-characterized patients.

Exact Sciences opened down 14% today, but that may be mostly profit taking after a substantial run-up going into the data release. There's still some risk here -- witness Sequenom (Nasdaq: SQNM) for an extreme blowup of a test-maker -- but Exact Sciences isn't particularly expensive. If you're willing to wait for the test launch, the risk-reward looks good from here.

Motley Fool Options has recommended a diagonal call position on UnitedHealth Group, which is a recommendation of the Motley Fool Inside Value and Motley Fool Stock Advisor newsletters. The Fool owns shares of UnitedHealth. 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.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.