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Bio-Reference Laboratories (BRLI) By: Garrett Bill

Bio-Reference Laboratories (BRLI) By: Garrett Bill. Overview. Provides clinical laboratory testing services for the detection, diagnosis, and treatment of diseases. BRLI is the fourth largest full service laboratory in the United States.

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Bio-Reference Laboratories (BRLI) By: Garrett Bill

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  1. Bio-Reference Laboratories (BRLI)By: Garrett Bill

  2. Overview • Provides clinical laboratory testing services for the detection, diagnosis, and treatment of diseases. • BRLI is the fourth largest full service laboratory in the United States. • The largest independent regional laboratory in the Northeastern market • Provides its services directly to physicians, hospitals, correctional facilities, and other health organizations.

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  4. Key Financials (Morningstar & Reuters) • 52 week range= $17.50-25.99 • Market Cap= $570.56 Million • Projected Div Yield= N/A • P/E= 17.40 • Profit Margin= 5.69% • ROA 5yr= 11.00% • ROE 5yr= 18.50% • Interest Coverage= 36.57 • Purchase Price= $13.71 • Recent Price= $19.43 • Shares Held= 100 • $ Gain/Loss= $853.51 • Current Value= $2923.50 • FV Estimate= X • 1yr Target Est.= $25.50 • Financial Leverage= 1.60

  5. Industry Comparison (Morningstar)

  6. Reasons for Growth • Aging of the population of the United States; • Awareness by patients of the value of laboratory tests; • Decrease in the cost of tests; • Decrease in the influence of managed care organizations on the ordering patterns of their physicians; • Development of sophisticated and specialized tests for early detection of disease and disease management; • Diagnosis and monitoring of infectious diseases such as AIDS and Hepatitis C; • Early detection and prevention as a means of reducing healthcare costs; • Employer sponsored wellness programs; • Research and development in genomics.

  7. Recent News On August 25, 2011,BRLI reported 26% increase in net income, 22% increase in net revenue, 20% increase in patient count. Bio-Reference Laboratories, Inc. announced that the Company and Massachusetts General Hospital (MGH) have entered into a definitive agreement to collaborate in the development of clinical diagnostic tests that will expand the use of personalized medicine for the identification and treatment of solid tumors. (11/30/2010) Bio-Reference has been able to increase its lab capacity from 59,900 sq. feet to 347,400 sq. ft since 1999 and has immediate space for future expansion.

  8. Risks • Very regulated industry which is subject to audits, fines, and lawsuits. • Waste management • Patient confidentiality • Possible reduction of reimbursements for Medicare. • Intellectual Property • Bio-Reference diligently researches all matters that may give rise to an intellectual property issue and has taken substantial legal steps to make sure that all such matters are fully considered and understood.

  9. Analysts’ Opinions • Recommendations • Strong Buy = 2 • Buy = 2 • Hold = 3 • Sell = 0 (Yahoo Finance)

  10. Recommendation We should hold on to BRLI because of the strong growth for clinical laboratory testing and solid business position. Due to numerous reasons, specifically due to the aging of the population, more efficient laboratory testing, and recent awareness of the value of clinical testing, BRLI will experience more demand in business. BRLI is a growth company that has experience continued growth and profits. If continued to hold on, we will earn excess returns in the form of capital gains.

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