Quest Diagnostic Incorporated – Rare Stock with 30% Upside OpporIf you like this idea, please don’t forget to Boost it.
Fundamental Indicators:
Sector – Healthcare
US Business Cycle Stage – late cycle, when this sector is favourable
Revenue – consistently growing for the past 5 years, with 9% average annual rate
Profits – explosive growth until 2021 and slight reduction in 2022 TTM
Net margin – effective company with 15% margin
P/E – quite low with 10.8 ratio compared to S&P500 with 21 and Healthcare sector with 23
Liabilities - debt ratio is at 0.51 which is within normal limits, Net Debt/ EBITDA is at 1.28 – no problems with debt
Conclusion – highly effective company with low valuation, considering that this is a defensive sector in the late business cycle, it is likely to continue growth to update historic highs
Technical Analysis (Elliott Waves):
Main scenario of this idea suggests that we are still observing development of the global growth cycle which is currently at the stage of completing wave C of 3 in an Ending Diagonal pattern (see higher timeframe graph)
The key elements of this scenario are Contracting Tringle of wave 4 that lasted between 2006 and 2011m which reflects accumulation phase, and the final fifth which is taking a complex shape
This final fifth wave is clearly shaping up by a choppy movement which indicates formation of an Ending Diagonal (see guidelines for Ending Diagonals below)
Waves A and B of the zigzag have already formed and wave C is also near completion with the fifth wave just about to start
This may present a good long opportunity with a target of $174.16 – up to 30% upside
This is a higher timeframe to reflect the full history of Quest Diagnostic Incorporated and to provide full wave count:
This is the link to the guidelines for Ending Diagonals
What do you think about Quest Diagnostic Incorporated and its short term prospects?
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