|
Medical Diagnostics: Five Health Care Reform Beneficiaries 04-15-2010 "There are also people who avoid the doctor's office, not because they're afraid of needles, but because they can't afford it," says growth stock specialist Marc Lichtenfeld. The contributing editor to Investment U explains, "However, times are changing. The new health care bill will enable millions more people to get their various conditions checked out. As a result, the diagnostics industry should boom. "The diagnostics industry is a $1 billion market that is showing 25% annual earnings growth. Let's take the two dominant players in the diagnostics field -- Quest Diagnostics (DGX) and Laboratory Corp. of America (LH). "Combined, they generate over $12 billion in revenue and offer services ranging from routine bloodwork to molecular genetics and cancer detection. "In fact, molecular diagnostics is expected grow 19% per year to become a $7 billion a year industry by 2011. Oncology and genetic testing is expected to fuel the growth. "If you're willing to take on a little more risk in exchange for greater growth opportunities, consider Genoptix (GXDX). After hearing Genoptix's presentation at the J.P. Morgan Healthcare Conference a few months ago, I did a little digging of my own. "Genoptix provides diagnostic services, which focus on cancers of the blood. But doctors aren't simply provided with a printout of data. Genoptix has hematologists (those who specialize in the study of the blood) on staff who work with the patients' oncologists to ensure proper diagnosis and treatment. This is a $1 billion market. "And with Genoptix's earnings growth projected to exceed over 25% annually over the next five years, I see a positive prognosis for the firm. "Two other companies specializing in diagnostics to look at are... * Genomic Health (GHDX): This is a cancer diagnostics company, which tests for breast cancer and colon cancer. Its Oncotype DX test shows breast cancer patients how likely they are to benefit from chemotherapy. * Bio-Reference Laboratories (BRLI): Operating in the New York tri-state area, the firm is similar to Quest and Lab Corp, but smaller. However, earnings growth is expected to total more than 18% per year through 2014, versus 12% for both Quest and Lab Corp. "While most diagnostics companies should enjoy success over the coming years, it's the small caps that are likely to provide the stronger growth prospects. Steven Halpern's TheStockAdvisors.com offers a free daily review of the favorite stock ideas of the nation's top financial newsletter advisors.
|
