Lockheed Martin Corporation (LMT) and Two Other Companies Record Massive Insider Selling

This Healthcare Diagnostics Company Saw its CAO Sell Shares Last Week

The insider buying activity at Laboratory Corp. of America Holdings (NYSE:LH) has been non-existent in recent years, whereas the volume of insider selling has been constantly on a rise. Chief Accounting Officer Edward T. Dodson sold 9,392 shares on Wednesday at prices that fell between $126.07 and $126.82 per share, cutting his overall holding 2,716 shares.

Laboratory Corp. of America Holding is the leading healthcare diagnostics in the world that conducts its business operations through two segments: LabCorp Diagnostics (LCD) and Covance Drug Development (CDD). LCD is an independent clinical laboratory business that comprises a network of 39 laboratories and roughly 1,700 patient service centers (PSCs), while CDD operates as a drug development services company. Some analysts and investors might be concerned that the healthcare diagnostics company is vulnerable to declining fees for laboratory services reimbursed by Medicare, but only 13% of LCD’s revenue was reimbursed under the Clinical Laboratory Fee Schedule (CLFS) and Physician Fee Schedule (PFS) last year. The global market for both consumer lab tests and pharmaceutical research continues to be quite fragmented, so LabCorp appears to be well-positioned to keep expanding overseas through mergers and acquisitions. The company has invested net cash of $5.8 billion and equity of $1.8 billion in strategic business acquisitions since 2010.

Shares of LabCorp have gained 11% in the past three months and are up 1% year-to-date. The stock is priced at nearly 13.0-times expected earnings, below the forward P/E ratio of 15.5 for the healthcare industry and the ratio of 17.7 for the S&P 500 Index. Larry Robbins‘ Glenview Capital had 5.66 million shares of at Laboratory Corp. of America Holdings (NYSE:LH) in its equity portfolio at the end of 2015.