The weather is starting to turn. You can feel it. You can see it in the forecast. Gone are the grumblings about 90-degree highs. Back are the sweaters in the evenings and the signs for “Free Flu Shots” at the local grocery store. And you know what’s next.
We can expect headlines about the Second Wave to pick up steam. And that means a renewed focus on stocks that deal in Covid-19 protection, testing, and related resources could be just around the corner.
With that in mind, we take a look at some of the more interesting plays in the space that could present market participants with opportunities in the period ahead, including: Alpha Pro Tech, Ltd. (NYSEAMERICAN:APT), Laboratory Corp. of America Holdings (NYSE:LH), Allstar Health Brands Inc (OTCMKTS:ALST), Lakeland Industries, Inc. (NASDAQ:LAKE), and Abbott Laboratories (NYSE:ABT).
Alpha Pro Tech Ltd (NYSEAMERICAN:APT) shares have been rebounding sharply in recent days, with the stock pushing off support at its 200-day moving average, rising by as much as 23% in the past few days.
The company sells disposable protective apparel, building supply products, and infection control products in the United States and internationally. The big idea powering the stock lately is its products of masks capable of helping to prevent the spread of COVID-19. The company operates through three segments: Building Supply, Disposable Protective Apparel, and Infection Control. The company distributes its products through a network of purchasing groups, distributors, and independent sales representatives, as well as through its sales and marketing force.
Alpha Pro Tech Ltd (NYSEAMERICAN:APT) most recently announced financial results for the three month period ended June 30, 2020.
Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, “Alpha Pro Tech delivered another exceptional quarter with triple-digit organic revenue growth, a 123% increase compared to the second quarter of 2019. Gross profit margin was nearly 50%, which is above our historical average, due to a shift in product mix towards more personal protective equipment (PPE) and extremely strong cash flow. As a result of the ongoing COVID-19 pandemic, demand for our N-95 face masks and other PPE remains strong and shows no indications of slowing as we move into the second half of 2020. Our backlog of orders continues to increase with current delivery commitments into the second quarter of 2021.”
Alpha Pro Tech Ltd (NYSEAMERICAN:APT) managed to rope in revenues totaling $25.5M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 123.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($25M against $11.7M).
Laboratory Corp. of America Holdings (NYSE:LH) is another stock that has started to power higher over recent days as headlines about a coming pick-up in Covid-19 data begin to circulate ahead cold and flu season.
The company offers clinical laboratory tests, such as blood chemistry analyses, urinalyses, blood cell counts, thyroid tests, Pap tests, hemoglobin A1C and vitamin D products, prostate-specific antigens, tests for sexually-transmitted diseases, hepatitis C tests, microbiology cultures and procedures, and alcohol and other substance-abuse tests. Most importantly for this analysis, it is also a key player in Covid-19 testing.
Laboratory Corp. of America Holdings (NYSE:LH) most recently announced the launch of the first testing method to simultaneously detect COVID-19, influenza A / B, and respiratory syncytial virus (RSV). According to the release, the single-panel test, which detects multiple types of infections, can help doctors diagnose patients and make decisions about treatment options. The test is available to patients through doctors, hospitals, and other authorized healthcare providers nationwide. LabCorp has also applied to the U.S. Food and Drug Administration (FDA) to offer the combined test through its Pixel by LabCorp™ at-home test collection kit, which would offer added convenience and accessibility.
“The U.S. is facing the most challenging health crisis in a century and is about to enter flu season, which has the potential to put additional strain on our healthcare system and cost lives,” said Dr. Brian Caveney, chief medical officer and president of LabCorp Diagnostics. “Individuals infected with COVID-19, influenza A / B, or RSV, often experience similar symptoms of cough, fever, chest tightness, and body aches, providing a potential surge of patients seeking testing. Leveraging our scientific and technological expertise to simultaneously test for four major respiratory viruses, including COVID-19, will provide doctors a simple, efficient way to diagnose their patients.”
And the stock has been acting well over recent days, up something like 7% in that time.
Laboratory Corp. of America Holdings (NYSE:LH) generated sales of $2.8B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -1.9% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($557M against $3B, respectively).
Allstar Health Brands Inc (OTCMKTS:ALST) frames itself as a specialty pharmaceutical and nutritional supplements company. One of its core assets at this point is its partnership with TPT Global Tech, a technology and solutions company.
The two companies are collaborating to create and distribute the QuickLAB module, a rapid testing solution for Covid-19. Testing is going to be a huge facet of any solution that can head off the Twindemic disaster that experts believe looms over the coming fall and winter.
The two companies had already recently signed an agreement for Mexico and other Latin American countries through TPT Global Tech’s partner New Orbit Technologies. Now, as of this week, they have signed an expanded agreement to bring QuickLAB distribution to Canada and US to add to the existing Non-Exclusive Distribution Agreement for Mexico and other Latin American countries.
“We are very pleased to announce the expansion of our initial non-exclusive partnership agreement to now include Canada and the US. AllStar Health Brands’ goal is to work with TPT Medtech for both the geographic expansion of the QuikLAB modules within the US and Canada and also offer the best testing technologies within the QuikLAB modules. Both companies have a shared vision to make one-stop, mass testing for Covid-19, a near-term reality in the Americas,” stated Dr. Daniel Bagi, President of AllStar.
Allstar Health Brands Inc (OTCMKTS:ALST) believes that given the high Covid-19 infection rates around the world, and the ability to set up the QuikLAB testing modules at almost any location, the QuikLAB option may be part of the solution in combating the effects of this pandemic.
The company notes that the QuikLAB testing modules offer a fast, complete testing option, at a rapid throughput, – up to 50 tests/hour, using either the PCR or antibody tests or both currently available on the market. The goal is to provide results within minutes to a few short hours, so appropriate treatment or isolation protocols can be recommended based on the results of the testing.
Since then, the company has gotten increasingly involved in the testing niche. Looking ahead, AllStar says it plans to provide several options for FDA, EUA-approved rapid Covid-19 anti-body tests, and PCR tests for the TPT Medtech QuikLab modules. This could make its QuickLAB module a kind of one-stop-shop solution for communities with less than adequate testing supplies anywhere in the western hemisphere now that its partnership extends through the US and Canada.
ALST is surely a more speculative name on this list. But with the company’s recent expansion and partnership, it may also be the most underpriced.
Lakeland Industries Inc (NASDAQ:LAKE) is another “goto” play in the Covid-19 space. The company manufactures and sells industrial protective clothing and accessories for the industrial and public protective clothing market worldwide.
It offers limited use/disposable protective clothing, such as coveralls, laboratory coats, shirts, pants, hoods, aprons, sleeves, arm guards, caps, and smocks; high-end chemical protective suits to provide protection from highly concentrated, toxic and/or lethal chemicals, and biological toxins; and firefighting and heat protective apparel to protect against fire, burns, and excessive heat.
Lakeland Industries Inc (NASDAQ:LAKE) just recently announced financial results for its fiscal 2021 second quarter ended July 31, 2020, including net sales for 2Q21 of $35.0 million, up 27.5% as compared with 2Q20 of $27.5 million, gross profit for 2Q21 of $17.3 million, compared with 2Q20 of $10.4 million, and gross margin as a percentage of net sales in 2Q21 of 49.5%, compared to 37.9% in 2Q20.
Charles D. Roberson, President and Chief Executive Officer of Lakeland Industries, stated, “Our Company has just set a new standard of excellence for PPE manufacturers anywhere in the world. Following our fiscal 2021 first quarter that was extraordinary with record setting financial results, we just exceeded that as measured by key performance measures. Against a backdrop of very challenging times, I am very proud of the efforts and achievements of our global team. We are delivering for our existing and new customers alike, our shareholders, and, perhaps most importantly, for the health and safety of people around the world as we all contend with the continued COVID-19 pandemic.”
Even in light of this news, LAKE has had a rough past week of trading action, with shares sinking something like -3% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way.
Lakeland Industries, Inc. (NASDAQ:LAKE) pulled in sales of $35M in its last reported quarterly financials, representing top line growth of 27.5%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($34.9M against $17.1M).
Abbott Laboratories (NYSE:ABT) has been a central Covid-19 play due to its innovations in testing technology. Its most recent success was the approval by regulators of a game-changing cheap and easy Covid-19 test that may soon become the gold standard in the space.
Overall, its Diagnostic Products segment offers laboratory systems in the areas of immunoassay, clinical chemistry, hematology, and transfusion; molecular diagnostics systems that automates the extraction, purification, and preparation of DNA and RNA from patient samples, as well as detects and measures infectious agents; cartridges for blood analysis; rapid diagnostics systems; molecular point-of-care testing for HIV, influenza A and B, RSV, and strep A; cardiometabolic test systems; drug and alcohol test systems, as well as remote patient monitoring and consumer self-test systems; and informatics and automation solutions for use in laboratories.
Abbott Laboratories (NYSE:ABT) just announced the start of the LIFE-BTK clinical trial to evaluate the safety and effectiveness of the company’s new Esprit™ BTK Everolimus Eluting Resorbable Scaffold System. According to the release, this is the first Investigational Device Exemption (IDE) trial in the U.S. to evaluate a fully resorbable device to treat blocked arteries below the knees, or critical limb ischemia (CLI), in people battling advanced stages of peripheral artery disease (PAD). The first patient was enrolled by Danielle Bajakian, M.D., a vascular surgeon at New York-Presbyterian/Columbia University Irving Medical Center.
“Far too many people are impacted by peripheral artery disease, and this new drug-eluting resorbable scaffold is needed to offer meaningful improvements in how this disease is treated,” said Nick West, M.D., divisional vice president, Medical Affairs, and chief medical officer in Abbott’s vascular business. “Patients treated with balloon angioplasty often require repeat procedures on treated arteries, and therefore a drug-eluting resorbable device is ideally-suited to provide mechanical support for the vessel, reduce the chance of vessel re-narrowing and then gradually disappear over time.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 4% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 6% in that time on strong overall action.
Abbott Laboratories (NYSE:ABT) managed to rope in revenues totaling $7.3B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -8.2%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($5B against $11B, respectively).
