When a company is in a field with a lot of competition, the key to success is to differentiate the product. People without a lot of investment experience may not see differences between companies in a given sector, but differences exist if one looks closely enough. Although these differences may seem small or subtle, they can make the difference between a company that just chugs along, and one experiencing rapid growth.

Those differences come down to which company has the more visionary management. As a private equity investor once told me, you don’t invest in companies — you invest in people.

People, especially the CEO, are what make the difference at Bio-Reference Laboratories (Nasdaq: BRLI). The company is led by Marc Grodman, who also happens to be the Chairman and President. His vision differs from competitors like Laboratory Corp (NYSE: LH) and big-time player Quest Diagnostics (NYSE: DGX), in that he stands steadfastly by his philosophy that top-notch service and science is why doctors should use his company instead of the others.

Mr. Grodman decided to focus on services that other competitors don’t, and that’s where product differentiation enters the picture. Medicine can get mighty complex, and doctors can demand some very esoteric tests. That’s exactly the name Bio-Reference uses for the diagnostic work the company’s 10-K filing identifies as tests in the areas of endocrinology, genetics, immunology, microbiology, oncology, serology and toxicology. And it’s more than a high-margin business. It’s also growing very quickly because of three secular trends: 1) People’s generalized fear of cancer, 2) doctors ordering every test under the sun to avoid malpractice claims, and 3) just plain old improving technology.

Grodman also decided to focus the company’s routine diagnostic testing services in the New York and New Jersey markets exclusively. This allows the company to tailor its sales for one specific region, hunting for competitive advantages and exploiting them. As a smaller operation with this kind of focus, it allows for more customized service that is more responsive and has fewer layers of staff. The company doesn’t need to expand beyond its current region for the near future. Centered as it is in the massive metro area of New York City, there’s plenty of market share to seize from other competitors. And as the numbers show, it’s working.

These esoteric tests now account for more than 53% of the company’s revenue, compared to 48% last year. Meanwhile, the company has quietly grown revenue by +20% every single year since 1995. Earnings are expected to rise +22% this year and next. By that point, Bio-Reference will be generating $500 million in revenue, and still have plenty of room to grow — since Quest has $7.5 billion in revenue. There’s plenty of market share available to grab, and +20% revenue growth each year suggests Bio-Reference is earning converts.

Testing Bio-Reference’s financials yields a clean bill of health. The company has $17 million in cash, only $8 million in long-term debt, and its annual interest expense of $1.5 million is easily covered by its $38 million in EBITDA.

Of course, prudent investors should always take a peek at risks. With competition coming in the form of giants like Quest, Bio-Reference must continue to grow. That means getting more doctors on board for its esoteric testing, and opening up new markets for regular testing. The other dicey factor is that 23% of the company’s revenue comes from Medicare reimbursements. There’s no clear picture about how it will be affected by the new health care reform law. However, since esoteric testing generally isn’t covered by Medicare, a continued focus on growing that higher-margin division would kill two birds with one stone.

Action to Take –> Bio-Reference Laboratories is a classic small-cap growth play. It’s the scrappy runt of the litter, with a clear company mission, strong financials and impressive sustained growth. Its products are different from the competition, it has a high barrier to entry and visionary management. Given the company’s track record of growth and the secular trends, I am very comfortable putting a multiple of 22 on earnings and carrying that out eight years. That would give the company $3.08 in earnings per share in 2017, for a stock price of $68 — a +240% return from today’s prices.