It is painfully obvious to me that no one on the DGX message boards is writing about many of Quest's exciting successes and initiatives. As a company, Quest is totally focused on growth and in developing the skills and leadership abilities of their employees at all levels. Quest succeeds because they hire great people and help them launch great careers. Quest also succeeds because they excel at translating cutting-edge science into breakthrough laboratory tests. Many experts consider Quest to be the most powerful scientific engine in the clinical laboratory field. Breakthrough clinical laboratory tests form a cornerstone of Quest's strategy for growth. If you listen to Ken Freeman speak, you will quickly realize that Quest's strategy for growth, and the success of their strategy, have given them a strong platform for continued growth.
I am not a Quest employee. I am a DGX shareholder and I follow the clinical laboratory field. I think I know what's going on.
What's yor opinion about today's 8% drop in price? Time to buy-in I suspect. Usual response to earnings reports. Stock will rachet back up. Buyers love this time. Agreed? If you look back at the quarterly earning reports and the low growth rate vs LH, the tock has always reacted like a child and then investor-children as I call them come back to their senses and the stock goes back up. Now is the time to get in with both feet.
I am an investor. I don't work for Quest. In particular, I have focused on the Health Care sector for the past year and a half. I like DGX, I think there is good upside potential. But I have to tell you, your post is the largest pile of fluff that I think I've ever seen. There is a lot of chest beating and not much substantance. Let's look at it piece by piece. "Quest is totally focused on growth and in developing skills and leadership abilities of their employees at all levels." Name one company that isn't focused on growth. If you look at Quest, between 1996 and 1998 their revenue growth was heading downward. The purchase of SCBL has been the most signifcant growth Quest has experienced. Comparing all the labs, Quest was in the basement as far as new sales were concerned versus the competitors. But, like I said I like Quest. Because in spite of lower growth, they are the industry leader (in size). As you stated, you don't work for Quest. So how the hell would you know anything about their internal inititives towards employee developoment or if their development is better than what the other guys are doing. What cutting-edge science has Quest introduced that equates into more revenue or superior market position? I believe that LabCorp leads all labs when it comes to PCR. Byong that, I don't know what area that Quest claims as the undisputed leader. "Many experts consider Quest to be the most powerful scientific engine in the clinical laboratory field. Breakthrough clinical laboratory tests form a cornerstone of Quest's strategy for growth." What on earth were you smoking when you wrote that statement. My sense is that you are in fact a Quest employee. Your post is flowery and holds a certain endearment to Quest. Investor's are more concerned with hard financial facts. Not testimonials.
I know what is going on at Quest. I really do. And I know what is going on at all other clinical laboratories, including LabCorp, Specialty, Unilab, and ARUP, to name a few. I am in National Sales for a major manufacturer of diagnostic kits and instruments. I have visited, and continue to visit, most of the Quest Diagnostics sites, as well as other clinical laboratories. I have spoken with, and continue to speak with, Quest personnel. They are all wonderful people. I am very impressed with the kind of people that Quest has selected. These people know what they are doing. They know how to make things happen. They know what PCR is all about. They are leaders in PCR. If anything new is going to happen in the PCR field, Quest people will make it happen.
Last week, I spoke with a technical manager at Quest. After I complimented her on the excellent laboratory facility that she works in, she remarked: "Only the best is good enough at Quest!" It is for reasons like this that I am very happy and proud to be a DGX shareholder.
One more thing. One of the key ingredients of Quest employees that I rarely find at other clinical laboratories is LOYALTY.
Although LabCorps used to be a leader in PCR (when they were associated with Roche), Nichols Institute does an awful lot of this technology, has several acknowledged experts on staff, and is at least as good (probably better) at it than LabCorps, now. Other points in your post which relate to the large business expansion resulting from acquisition are accurate. This industry became profitable by increasing prices in late 1999 until recently. The price increases are appropriate because of the improvements in technology (Cytec thin PAPs are an example) another one is HIV Viral Phenotyping. But, price increases can't be sustained indefinitely. See my next post for details.