Traders Keen on Quest Diagnostics Incorporated (NYSE:DGX) as it Makes Headlines With Moves

Quest Diagnostics Incorporated (NYSE:DGX) making news as their share price hit $96.62 at the end of the most recent trading day.

Considering that price volatility is equivalent to risk, a commodity’s trading range is a great indicator of risk.  Conservative investors will gravitate towards securities with smaller price fluctuations as compared to securities with larger price swings, preferring to invest in relatively stable sectors such as health care, utilities, and telecommunications and avoiding high-beta sectors like commodities, technology, and financials.

Beta measures the volatility of a security in comparison to the market as a whole.  The tendency of a security’s returns is to respond to swings in the market.  For example, a beta of 1 means that the security’s price will move in lockstep with the market.  A beta of less than 1 indicates that the security will be less volatile relative to the market.  A beta of greater than 1 tells us that the security’s price will be more volatile than the market.  Beta is an expression of the tradeoff between maximizing return and minimizing risk.  Quest Diagnostics Incorporated (NYSE:DGX)’s Beta number is 0.6. 

A 52-week high/low is the highest and lowest share price that a stock has traded at during the previous year.  Investors and traders consider the 52-week high or low as a crucial factor in determining a given stock’s current value while also predicting future price movements.  When a commodity trades within its 52-week price range (the range that exists between the 52-week low and the 52-week high), investors usually show more interest as the price nears either the high or the low.

One of the more popular strategies used by traders is to buy when the price eclipses its 52-week high or to sell when the price drops below its 52-week low.  The rationale involved with this strategy says that if the price breaks out either above or below the 52-week range, there is momentum enough to continue the price fluctuation in a positive direction.  Quest Diagnostics Incorporated (NYSE:DGX)’s high over the last year was $111.16 while its low was $88.67.

Quest Diagnostics Incorporated (NYSE:DGX)’s 52-Week High-Low Range Price % is 35.35%.  Countless factors affect a security’s price and, therefore, its range.  Macroeconomic factors such as interest rates and the economic cycle significantly impact the price of securities over lengthy periods of time.  A big recession, for example, can dramatically widen the price range equities as they plummet in price. 

There is nothing more important than earnings for stock prices.  Quarterly reports aid investors in getting a better understanding about how a company has been faring, along with its near-term outlook.

Many times, however, an earnings report could contain a surprise that really affects a stock stock price.  These earnings “surprises” can lead to big gains or inflict huge losses to a portfolio, so it is extremely important to find these surprises ahead of time.

Leading investment research firm focused on stock research, recommendations, and analysis, Zacks Investment Research have developed a method of predicting these surprises called “Zacks Earnings ESP (Expected Surprise Prediction).  This method looks to find earnings surprises by focusing on the most recent analyst revisions.  This is because if an analyst reevaluates their earnings estimate immediately before an earnings release, it indicates that they have new information which could be more accurate than what analysts thought about a company prior.

Quest Diagnostics Incorporated (NYSE:DGX)’s average EPS Surprise over the previous 4 quarters was 7.43.  The previous EPS surprise percentage was 9.93% and the actual EPS used in the surprise was $1.38999. 

Quest Diagnostics Incorporated (NYSE:DGX)’s current average broker recommendation is 2.72 with 3 brokers rating it a “Strong Buy/Buy”. 

From Zacks’ website:

“At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. For more than a quarter century, it has more than doubled the S&P 500 with an average gain of +25% per year. These returns cover a period from 1988 through 2016.

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Earnings estimate revisions are the most powerful force impacting stock prices.

With this crucial finding, he developed the Zacks Rank to harness the power of earnings estimates. Note this quantitative stock-rating system is purely mathematical. We’re not influenced by Wall Street or some agenda to determine the ratings, so you can use this stock-selection tool to trade with confidence and accomplish your financial goals.

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  • Price Response Indicator: Shows what a stock price is likely to do after an earnings report.
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  • Earnings ESP (Expected Surprise Prediction): Determines the likelihood of an earnings surprise BEFORE it’s reported.
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