The Huge Opportunity in Diagnostic Testing Stocks (LH, GDBY, ABT, BIO, CVS, EPWCF, WBA)

Despite its tragic human toll, the pandemic accomplished a number of major societal leaps, including deregulating telehealth, penetrating delivery and virtual communications markets across the population, and fast-forwarding our vaccine industry by possibly decades in terms of collaboration and technical innovation.

But one area of the market that has also been powered to new growth potential that may not be as crowded with growth investors should also be a key focus going forward: Diagnostic Testing clinics.

Diagnostics and convenient healthcare services hold the potential to radically reshape our broad healthcare system as we move to a hybrid model that pairs telehealth, satellite diagnostics, and limited in-patient care, which stands to reduce costs and increase efficiency.

But the core of that transition is the diagnostic clinic space. With that in mind, we take a look at some of the most interesting stocks in that space below.

 

Laboratory Corp. of America Holdings (NYSE:LH) operates as a life sciences company, which engages in the provision of vital information to help health professionals make clear and confident decisions. It operates through the Drug Development and Diagnostics segments.

The Drug Development segment consists of lead optimization, preclinical safety assessment, analytical services, clinical trials, central laboratories, biomarkers, and companion diagnostics, market access, and technology solutions. The Diagnostics segment includes primary care, women’s health, specialty medicine, oncology, ACOs, and hospitals and health systems.

Laboratory Corp. of America Holdings (NYSE:LH) recently announced results for its fourth quarter and year ended Dec. 31, 2021, including the company’s full-year 2022 guidance and longer-term outlook, including news that revenue for the quarter was $4.06 billion, a decrease of (9.7%) from $4.49 billion in the fourth quarter of 2020.

“Labcorp’s ability to harness science, innovation and technology helped us advance our strategy, effectively respond to the global pandemic, and drive meaningful financial performance throughout 2021,” said Adam Schechter, chairman and CEO of Labcorp. “We experienced Base Business growth of 8.2% in the fourth quarter and 19.4% in 2021. This provides significant momentum and sets the stage for continued Base Business growth in 2022 and beyond.”

The stock has suffered a bit of late, with shares of LH taking a hit in recent action, down about -5% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -3%.

Laboratory Corp. of America Holdings (NYSE:LH) managed to rope in revenues totaling $4.1B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -9.7%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.5B against $2.8B, respectively).

 

Goodbody Health Inc (CNSX:GDBY) could be one of the most interesting emerging opportunities in the space after the company’s recent pivot into the clinical diagnostics space. The company operates within the United Kingdom and Europe as a trusted distributor and retailer of quality, accredited wellness products and diagnostic services to provide a unique ‘frontline’ healthcare service in the local community and enable customers to manage their health care digitally.

GDBY is disrupting the existing inefficient model of courier to laboratory style testing to offer new technologies, a proven model, and expertise to provide its customers with the knowledge necessary to make considered choices for their ‘health span’. GDBY’s products and services grow local level amenities through its community diagnostic hub network distribution, offering much needed revenue to pharmacists and alleviating pressure from the NHS.

Goodbody Health Inc (CNSX:GDBY) announced just this morning the rollout of its plan to introduce blood testing through its existing network of clinics while it continues to contract with more new pharmacies including 15 last week.

According to the release, this process includes venous blood draws with an in-clinic phlebotomist and Goodbody have launched its own phlebotomy training academy, training up staff within its existing clinic network to allow them to offer in clinic health and wellness blood tests. Newly partnered clinics will also have the opportunity to train up to three members of their staff within the phlebotomy training school.

As noted by the company, the Group continues to bring in innovative technologies into its clinics to offer results to tests such as cholesterol and diabetes delivered in minutes. These tests help people assess their wellness and determine any lifestyle changes required to live better giving feedback to Goodbody Health to develop the model including additional products and services. Meanwhile COVID testing revenues are still averaging at over 500 tests per day, remaining strong due to other country entry requirements although the UK restrictions have eased.

Goodbody Health Inc (CNSX:GDBY) Executive Chairman, Geremy Thomas, said; “We have set up a model for blood testing, that our partners cannot wait to roll out as they see the benefits for everyone in their local area, while continuing to provide PCR testing for our customer base.”

 

Abbott Laboratories (NYSE:ABT) engages in the discovery, development, manufacture, and sale of a broad and diversified line of health care products. It operates through its Established Pharmaceutical Products, Nutritional Products, Diagnostic Products, and Medical Devices segments.

The Established Pharmaceutical Products segment refers to the international sales of a line of branded generic pharmaceutical products. The Nutritional Products segment caters to the worldwide sales of adult and pediatric nutritional products. The Diagnostic Products segment markets diagnostic systems and tests for blood banks, hospitals, commercial laboratories, and alternate-care testing sites. The Medical Devices segment includes electrophysiology, heart failure, vascular and structural heart devices for the treatment of cardiovascular diseases, and diabetes care products for people with diabetes, as well as neuromodulation devices for the management of chronic pain and movement disorders.

Abbott Laboratories (NYSE:ABT) recently announced the world’s first patient implants of a dual-chamber leadless pacemaker system as part of its AVEIR DR i2i™ pivotal clinical study. The implant of Abbott’s investigational Aveir™ dual-chamber leadless pacemaker represents a significant technological milestone for leadless pacing technology and is the first to occur around the world within the pivotal trial.

“The first-in-human implant of a dual-chamber leadless pacemaker is a major clinical milestone that will open up new possibilities for patients requiring pacing support,” said Dr. Daniel J. Cantillon. “Abbott has designed a device capable of treating these patients, and we’re excited to see this technology advance patient care.”

Even in light of this news, ABT has had a rough past week of trading action, with shares sinking something like -4% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -2%.

Abbott Laboratories (NYSE:ABT) powered revenues of $11.5B in overall sales during the company’s most recently reported quarterly financial data, driving top line growth of 7.2% on a year over year basis.

Other core stocks in the Lab and Clinic space include Bio-Rad Laboratories Inc. (NYSE:BIO), CVS Health Corp. (NYSE:CVS), Empower Clinics Inc. (OTC US:EPWCF), and Walgreens Boots Alliance Inc. (Nasdaq:WBA).

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Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing. http://www.facebook.com/ben.rouss