Cancer Genetics (CGIX) versus Laboratory Corp. of America (LH) Critical Review

Cancer Genetics (NASDAQ: CGIX) and Laboratory Corp. of America (NYSE:LH) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Cancer Genetics and Laboratory Corp. of America, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cancer Genetics 0 1 3 0 2.75
Laboratory Corp. of America 0 6 8 1 2.67

Cancer Genetics presently has a consensus price target of $6.00, suggesting a potential upside of 233.33%. Laboratory Corp. of America has a consensus price target of $180.07, suggesting a potential upside of 4.27%. Given Cancer Genetics’ stronger consensus rating and higher possible upside, analysts plainly believe Cancer Genetics is more favorable than Laboratory Corp. of America.

Profitability

This table compares Cancer Genetics and Laboratory Corp. of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cancer Genetics -54.65% -46.21% -24.62%
Laboratory Corp. of America 12.15% 16.30% 6.38%

Earnings and Valuation

This table compares Cancer Genetics and Laboratory Corp. of America’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cancer Genetics $27.05 million 1.84 -$15.80 million ($0.82) -2.20
Laboratory Corp. of America $10.44 billion 1.68 $1.27 billion $12.21 14.14

Laboratory Corp. of America has higher revenue and earnings than Cancer Genetics. Cancer Genetics is trading at a lower price-to-earnings ratio than Laboratory Corp. of America, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Cancer Genetics has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Laboratory Corp. of America has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Insider and Institutional Ownership

11.6% of Cancer Genetics shares are held by institutional investors. Comparatively, 91.7% of Laboratory Corp. of America shares are held by institutional investors. 21.3% of Cancer Genetics shares are held by insiders. Comparatively, 0.9% of Laboratory Corp. of America shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Laboratory Corp. of America beats Cancer Genetics on 10 of the 15 factors compared between the two stocks.

About Cancer Genetics

Cancer Genetics, Inc. is a United States-based company, which is engaged in the field of personalized medicine. The Company offers diagnostic products and services that enable precision medicine in the field of oncology through molecular markers and diagnostics. The Company offers a range of laboratory services that provide genomic and biomarker information. Its Select One Clinical Trials program provides a range of integrated and dynamic clinical trial services for both oncology and non-oncology genetic testing for Phase I-III trials along with ancillary services, including bioinformatics, biorepository and trials logistic support. The Company is developing a global footprint with locations in the United States, India and China. It also offers a portfolio of genotyping services, with access to over 400 validated genotyping assays, including Phase I and Phase II drug metabolizing enzymes, transporters, and receptors, and over 30 validated gene expression assays.

About Laboratory Corp. of America

Laboratory Corporation of America Holdings is a life sciences company that is integrated in guiding patient care, providing clinical laboratory and end-to-end drug development services. The Company operates as a healthcare diagnostics company. The Company operates through two segments: LabCorp Diagnostics (LCD) and Covance Drug Development (CDD). The LCD segment is an independent clinical laboratory business, which offers menu of frequently requested and specialty testing through an integrated network of primary and specialty laboratories across the United States. The CDD segment offers drug development services, and provides a range of drug research and development (R&D) and market access services to biopharmaceutical companies and medical device companies across the world. It serves a range of customers, including managed care organizations (MCOs), biopharmaceutical companies, governmental agencies, physicians and other healthcare providers.

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