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The Second Wave Pandemic Portfolio (NASDAQ: LAKE) (NYSEAMERICAN: APT) (OTC: ALST) (NASDAQ: FLGT)

The pandemic is raging once again, with new record levels in case numbers across the US and EU. The spike is striking and proves the point for those who warned that cooler temperatures would mean a resurgence.

The surge we have seen over the past week has set new records in many regions in terms of case numbers, with hospitalizations rapidly on the rise. With a vaccine still likely months away, PPE is the odds-on winner once again, along with social distancing and limited public gatherings.

While that may put a damper in stocks tethered to a full return to normalcy, and perhaps drive a fresh bout of volatility across the markets, there are stocks perfectly positioned for precisely this narrative turn of events.

With that in mind, here are a few of the more interesting and active names that fit the bill: Lakeland Industries Inc (NASDAQ: LAKE), Alpha Pro Tech Ltd (NYSEAMERICAN: APT), Allstar Health Brands Inc (OTC: ALST), and Fulgent Genetics Inc (NASDAQ: FLGT).

 

Lakeland Industries Inc. (NASDAQ: LAKE) manufactures and sells industrial protective clothing and accessories for the industrial and public protective clothing market worldwide. This is the dead-center target zone for the idea of a vaccine-less pandemic spike at this stage because it implies a scramble for limited supplies of protective gear. And LAKE represents a pure-play stock in that narrative.

The company 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.”

It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. Shares of the stock have powered higher over the past month, rallying roughly 30% in that time on strong overall action.

Lakeland Industries, Inc. (NASDAQ: LAKE) generated sales of $35M, according to information released in the company’s most recent quarterly financial report. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($34.9M against $17.1M).

 

Alpha Pro Tech Ltd (NYSEAMERICAN: APT) is another pure-play stock positioned at the heart of the PPE theme. The company sells disposable protective apparel, building supply products, and infection control products in the United States and internationally. The company operates through three segments: Building Supply, Disposable Protective Apparel, and Infection Control.

APT 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) recently announced that its Board of Directors has authorized a $5.0 million expansion of the Company’s existing share repurchase program. According to the release, with this authorized expansion, the Company now has approximately $7.0 million available to repurchase shares of the Company’s common stock, $2.0 million of which remains from the previous expansion, most recently announced in December 2019.

Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, “Our record revenue growth and cash flow generation through the first six months of 2020, in conjunction with the expectation of strong operating results for the remainder of this year based on continued high demand for our products driven largely by the COVID-19 pandemic, facilitated this decision by our Board of Directors. We believe that re-activating and expanding our share repurchase program at this time will deliver value to our shareholders.”

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action APT shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -6% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.

Alpha Pro Tech, Ltd. (NYSEAMERICAN: APT) generated sales of $25.5M, 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 40.5% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($25M against $11.7M).

 

Allstar Health Brands Inc. (OTC: ALST) is clearly the most speculative name on this list. But the stock has seen some extraordinary rips over recent months, and the company is now moving toward commercial-stage consummation of its partnership with TPT Global Tech, a technology and solutions company, collaborating to create and distribute the QuickLAB module, a rapid testing solution for Covid-19.

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, 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.

Allstar Health Brands Inc (OTC: ALST) most recently announced the Delivery of Initial Order of Equipment and Test Kits to Apogee Pharmaceuticals.

Dr. Daniel Bagi, President of AllStar remarked,” We are very excited to have delivered our initial order to Apogee Pharmaceuticals. AllStar fully expects follow-up orders for both the equipment and the test kits to fulfill Apogee Pharmaceuticals’ needs. In parallel we believe increased Covid-19 testing is the way of the future, especially as the pressure to re-open the economy increases. We offer several testing options including Point-of Care Antibody tests, PCR tests and we expect to soon have an antigen test available to our clients.”

Allstar Health Brands Inc (OTC: ALST) generated sales of $178K, 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 224.2% on the top line. ALST is surely a more speculative name on this list. That said, given the company’s recent expansion and partnership, and extremely cheap shares, ALST may represent an interesting opportunity for speculators.

 

Fulgent Genetics Inc (NASDAQ: FLGT) provides genetic testing services to physicians with clinically actionable diagnostic information. Its technology platform integrates data comparison and suppression algorithms, adaptive learning software, and genetic diagnostics tools and integrated laboratory processes.

The company primarily serves hospitals and medical institutions. It sells its tests through internal sales force, as well as through independent sales representatives in the United States and internationally.

Fulgent Genetics Inc (NASDAQ: FLGT) most recently announced that the Ohio Department of Rehabilitation and Correction has selected Fulgent Genetics for their COVID-19 testing needs.

“We look forward to aiding the Ohio Department of Rehabilitation and Correction in their effort to protect their employees and curb the spread of COVID-19 across their facilities,” commented Brandon Perthuis, Chief Commercial Officer of Fulgent Genetics. “Our Enterprise Platform offering enables the ODRC to test their employees in an extremely efficient manner, a process that takes approximately one minute per person. This offering provides a flexible and comprehensive testing solution for the ODRC that utilizes our gold-standard RT-PCR testing capabilities. Fulgent continues to raise the bar in offering COVID-19 testing solutions that meet the needs of large organizations and municipalities in a highly efficient and accurate manner.”

The stock has suffered a bit of late, with shares of FLGT taking a hit in recent action, down about -7% over the past week.

Fulgent Genetics Inc (NASDAQ: FLGT) pulled in sales of $17.3M in its last reported quarterly financials, representing top line growth of 105%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($21M against $6.5M).

 

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