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Quest Diagnostics (DGX) is Davis Opportunity Fund’s Largest Position

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Jose Karlo Mari Tottoc
·3 min read
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Davis Funds, an investment management firm, published its “Davis Opportunity Fund” fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 7.43% was recorded by the fund’s Class A shares for the year end of 2020, below its S&P 500 benchmark that delivered an 18.40% gains in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Davis Opportunity Fund, in their Q4 2020 investor letter, mentioned Quest Diagnostics Incorporated (NYSE: DGX) and shared their insights on the company. Quest Diagnostics Incorporated is a Secaucus, New Jersey-based diagnostic information services provider that currently has a $17.2 market capitalization. Since the beginning of the year, DGX delivered a 7.85% return, extending its 12-month gains to 46.32%. As of April 06, 2021, the stock closed at $128.31 per share.

Here is what Davis Opportunity Fund has to say about Quest Diagnostics Incorporated in their Q4 2020 investor letter:

"Within healthcare, our largest position is Quest Diagnostics, a leader in independent lab testing and diagnostics. Quest offers its lab services at a fraction of the cost of hospital labs, which constitutes a strong cost-savings value proposition to new and existing customers. It is not surprising that by virtue of the value Quest creates, the company is increasingly serving as an outsource partner to hospitals and healthcare networks across the U.S. We believe Quest’s market is very sticky and only getting larger. The cost savings accruing to Quest’s customers should bode well for the long-term success of the business."


Our calculations show that Quest Diagnostics Incorporated (NYSE: DGX) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Quest Diagnostics Incorporated was in 45 hedge fund portfolios, compared to 42 funds in the third quarter. DGX delivered a 2.27% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.