DaVita Expands, Strengthens Florida Presence - Analyst Blog

DaVita, the kidney care division of DaVita HealthCare Partners Inc. DVA, has recently declared the expansion of its diagnostic laboratory – DaVita Labs – in Florida that deals in dialysis organizations and physician practices. This will considerably strengthen its footprint in the city of DeLand, Florida.

DaVita Labs already boasts a strong existence in Florida, executing more than 47 million laboratory tests annually. Moreover, operations in the region have grown significantly over the last two years. The laboratories of DaVita in Florida mainly rely on renal-specific methodology and technology for enhancing the accuracy of its tests. DaVita currently operates between two Florida locations – Ft. Lauderdale and DeLand – spanning across 137,000 square-feet of diagnostic laboratories.

Growth in business and teammates requires new facilities. Thus, in order to tap more growth opportunities, the company is establishing a 65,000 square-foot facility in DeLand. The construction of the outlet is scheduled to commence by mid-2014 and end around early-to-mid 2015.

DaVita has been upfront in reaching out to more locations to capitalize on the opportunities and generate growth. The expansion of the DaVita Lab is not the first extension work by the company this year. So far in 2014, the company has inked a number of deals that highlight the company's intentions to extend its geographic reach. In Jan 2014, to realize its long-term growth strategy in Europe, DaVita allied with Praxis mit Nahe – an eminent nephrology practice in Germany.

In Feb 2014, DaVita entered into a deal with the Kingdom of Saudi Arabia's Ministry of Health to treat around 10,000 dialysis patients in the state. Again, DaVita ended up expanding its chronic conditions special needs plan (C-SNP) with SCAN Health Plan to reach out to more individuals in Los Angeles and Orange Counties, the same month.

We believe the strengthening of operations in DeLand will open up numerous opportunities for the company as DeLand has a total population of 27,031 as per the 2010 Census. Thus, the expansion initiative marks an important step for the company in recognizing its long-term growth objectives.

DaVita currently has a Zacks Rank #4 (Sell). However, some better-ranked stocks in the healthcare services space include Quest Diagnostics Inc. DGX, Envision Healthcare Holdings, Inc. EVHC and BG Medicine, Inc. BGMD. While Envision sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and BG Medicine carry a Zacks Rank #2 (Buy).