Bio-Reference Laboratories ( BRLI) provides lab testing services in the New York City area. Since 2007, it has increased revenue and net profit 23% a year. Its stock has achieved annualized gains of 20% during the same span.
Quarter: Fiscal first-quarter profit rose 11% to $4 million, or 15 cents, as revenue increased 31%. The operating margin stretched from 6.6% to 7.5%. Bio-Reference holds $15 million of cash and $34 million of debt, equal to a debt-to-equity ratio of 0.3. Stock: Bio-Reference has climbed 73% during the past year, beating U.S. benchmarks. It sells for a price-to-projected-earnings ratio of 20 and a price-to-book ratio of 4.8, 47% and 70% premiums to peer averages. It's also costly based on sales. Consensus: Of the four researchers following Bio-Reference, one recommends buying and three suggest holding its shares. Jefferies ( JEF) offers a target of $19, implying the stock could fall 14%. William Blair expects the shares to outperform.