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Quest’s New Service Acquisition Drives Mid-Cap Growth

Peter Neil

IHF Moves with the Market Trend, Rises 0.6%

(Continued from Prior Part)

IHF mid-cap stocks remain flat

The mid-cap (middle capitalization) stocks of the iShares US Health Care Providers ETF (IHF) remained flat, with an average return of 0.15% as of November 10, 2015. The IHF’s mid-cap stocks underperformed both it and the SPDR S&P 500 ETF (SPY), which gave returns of 0.6% and 0.25%, respectively, on the day.

IHF has 20 mid-cap stocks in its portfolio. They account for 28.9% of the portfolio. Out of these 20 mid-cap stocks, 11 gave positive returns as of November 10, whereas the remaining nine ended up in the red.

The mid-cap space includes stocks such as Health Net (HNT), Acadia Healthcare (ACHC), and Centene (CNC), which gave returns of -0.35%, -0.45%, and -0.4%, respectively.

The above graph reflects the performance of IHF’s mid-cap stocks in comparison with the performances of IHF and SPY. Since November 2, 2015, IHF’s mid-cap stocks have given a return of 6.5% compared to IHF’s 1.7% return and SPY’s 0.3% return.

Quest Diagnostics acquires outreach laboratory business

Quest Diagnostics (DGX) rose by 1.0% on November 10, 2015, following its announcement of its acquisition of Clinical Laboratory Partners’ (CLP) outreach laboratory business.

In its press release, DGX said that it “has entered into a definitive agreement to acquire the outreach laboratory service business of Clinical Laboratory Partners, a wholly-owned subsidiary of Hartford HealthCare (HHC). HHC is an integrated health care system with five hospitals in Connecticut. The transaction, once completed, is expected to enhance access to quality, affordable and convenient laboratory services for people in Connecticut.”

DGX closed at $68.43. The stock was trading above its 50-day moving average price and was close to its 100-day moving average price of $68.74. With an RSI (relative strength index) of 57, DGX is neither overbought nor oversold.

With its current price, the stock is trading at a price-to-book value of 32.06x. Its book value per share is $2.15. DGX has a weight of ~2.5% in IHF’s portfolio.

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