1. Laboratory Corp of America (LH) -Buy- Cadet: Jack Zippel 11/04/2014

2. About LabCorp Independent clinical laboratory that specializes in wide ranging diagnostic and testing services Clients include physicians, hospitals, governmental agencies, pharmaceutical companies Shares a duopoly position High level of acquisitions

3. Management CEO: David P. King - hired in September 2001 as Senior Vice President, worked way up through various management to CEO (9280996) COO: James T. Boyle, Jr. - COO and Executive Vice President since October 2009. Served as Senior Vice President of Managed Care since May 2006. (4569217)

4. Key Numbers Market Cap: 8.59B Price: $101.23 (11/03/14) Morningstar Fair Value Estimate: $127.00 P/E: 16.98 (Industry 25.41) EPS: 5.96 (Industry 2.45) Revenue 5 yr CAGR: 5.2%

5. A Quick Market History We probably can’t sustain this.. Hesitation The correction Too fast Really good year

6. Business Model “Five Pillars” 1. Deploy capital to investments that enhance our business 2. Enhance IT capabilities 3. Improve efficiency 4. Scientific innovation at appropriate pricing 5. Develop knowledge services

7. Expanding Investments Depth of service: MEDTOX Scientific - toxicology and pain management testing International presence: Orchid Cellmark (UK), Clearstone Central Laboratories (China, Japan, Singapore) New mentalities: Acquisition of Covance- move from testing to research/ development

8. IT Capabilites LabCorp Beacon: Analytics Easier/Faster access test information – Physicians Easier/Faster appointment scheduling - Public

9. Improve Efficiency Ability to lower costs faster than the scheduled cuts in Medicare reimbursement Propel™ robot - lower the number of employees involved in sorting and running the tests

10. Scientific Innovation 2013 - introduced 152 new tests BRCAssure - identify patients with mutations who are at increased risk for breast, ovarian and other cancers

11. Performance vs. DGX & ^GSPC

12. Covance Aquistion Why some investors aren’t on board ▫Usually the more similar the acquisition, the more successful ▫Disconnect? Why we should be ▫Contract Research Organizations projected to grow as drug companies outsource ▫Dip in price creates buying opportunity (Ride the rebound) ▫CRO gives life to “relatively stagnant” industry

13. Advantages Going Forward Duopoly (but outshine Quest) Cost-competitive advantage Strength in size Increased emphasis on study of genetics

14. Challenges Changes to medical industry as a result of new legislature Quest’s response to Covance acquisition Need to spark up the industry

15. Conclusion Buying opportunity Well established company Outperforms competitors (EPS) Good Value (PE, Estimates)

16. Work Cited/References http://library.morningstar.com/stock/analyst- report?t=LH&region=usa&culture=en-UShttp://library.morningstar.com/stock/analyst- report?t=LH&region=usa&culture=en-US http://finance.yahoo.com/q?s=LH http://phx.corporate- ir.net/phoenix.zhtml?c=84636&p=irol-irhomehttp://phx.corporate- ir.net/phoenix.zhtml?c=84636&p=irol-irhome http://stockcharts.com/h-sc/ui http://news.investors.com/110314-724630-cvd- stock-up-lh-down-on-buyout- deal.htm?ven=yahoocp&src=aurlled&ven=yaho ohttp://news.investors.com/110314-724630-cvd- stock-up-lh-down-on-buyout- deal.htm?ven=yahoocp&src=aurlled&ven=yaho o