Quest Diagnostics

Quest Diagnostics is one of the leading diagnostic and testing companies providing information services to doctors, hospitals, and managed care organizations.

Quest has approximately 150 laboratories and 2000 patient service centers. It processes over 140 million requisitions per year. At present, routine testing generates about 78% of revenues. The company is based in Teterboro, NJ and GlaxoSmithkline owns about 21% of the common stock.

Although, United Health has decided to use Lab Corp of America as its national provider, a position that Quest enjoyed previously, it is uncertain how negative this will be to the revenues of Quest. Although shares have fallen about 15% since Septenber 2006, I feel that the drop in shares, combined with the high ROIC provide an enticing entry point.

I haven't bought any shares of Quest but I am certainly considering the stock at this point.

I am continuing to research the stock at this point and will provide my new findings soon.