Is Quest Diagnostics Inc (DGX) A Good Stock To Buy?

Seeing as Quest Diagnostics Inc (NYSE:DGX) has faced bearish sentiment from the smart money, it’s easy to see that there is a sect of hedgies that slashed their entire stakes in the third quarter. Intriguingly, Conan Laughlin’s North Tide Capital dropped the largest position of the “upper crust” of funds monitored by Insider Monkey, totaling about $36.3 million in stock. James Dondero’s fund, Highland Capital Management, also dumped its shares, about $18.1 million worth. These moves are important to note, as total hedge fund interest was cut by 5 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Quest Diagnostics Inc (NYSE:DGX) but similarly valued. These stocks are Cemex SAB de CV (ADR) (NYSE:CX), Snap-on Incorporated (NYSE:SNA), Voya Financial Inc (NYSE:VOYA), and Alkermes Plc (NASDAQ:ALKS). This group of stocks’ market valuations resemble DGX’s market valuation.

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $598 million. That figure was $318 million in DGX’s case. Voya Financial Inc (NYSE:VOYA) is the most popular stock in this table, while Cemex SAB de CV (ADR) (NYSE:CX) is the least popular one with only 18 bullish hedge fund positions. Quest Diagnostics Inc (NYSE:DGX) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VOYA might be a better candidate to consider a long position.