It’s all about testing. Short of a vaccine, testing is the high-margin investment from a social survival standpoint for the whole system. Testing, testing, testing.
The virus is invisible. It’s impossible to see something that’s invisible, by definition. And it’s impossible to beat something you can’t see. Testing is how we see it, in a manner of speaking.
Given that we are barreling toward a fresh cold and flu season that will act as an overlay to the pandemic, investors may benefit from a focus on stocks that operate in the testing space, with a second wave potentially brewing.
With that in mind, here are a few of the more interesting and active names that fit the bill: Abbott Laboratories (NYSE: ABT), Allstar Health Brands Inc (OTC: ALST), and Sorrento Therapeutics Inc (NASDAQ: SRNE).
Abbott Laboratories (NYSE: ABT) discovers, develops, manufactures, and sells health care products worldwide.
The company’s Diagnostic Products segment offers laboratory systems in the areas of immunoassay, clinical chemistry, hematology, and transfusion; molecular diagnostics systems that automate 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. It also has nutrition and pharmaceutical divisions.
Abbott Laboratories (NYSE: ABT) just announced that the U.S. Food and Drug Administration (FDA) has issued Emergency Use Authorization (EUA) for its BinaxNOW™ COVID-19 Ag Card rapid test for detection of COVID-19 infection.
According to the release, Abbott will sell this test for $5. It is highly portable (about the size of a credit card), affordable and provides results in 15 minutes. BinaxNOW uses proven Abbott lateral flow technology, making it a reliable and familiar format for frequent mass testing through their healthcare provider. With no equipment required, the device will be an important tool to manage risk by quickly identifying infectious people so they don’t spread the disease to others.
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. ABT shares have been relatively flat over the past month of action, with very little net movement during that period.
Abbott Laboratories (NYSE: ABT) generated sales of $7.3B, 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 -5.2% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($5B against $11B, respectively).
Allstar Health Brands Inc. (OTC: ALST) is 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.
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.
“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.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, but support is in play.
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. But with the company’s recent expansion and partnership, it may also be the most underpriced.
Quidel Corporation (NASDAQ: QDEL) announced last week that it expects 3Q revenues in the range of $475 million to $477 million, surpassing analysts’ expectations of $394.3 million. The diagnostic testing provider will report its third-quarter results in late-October. Shares closed 2.8% higher on Thursday.
Quidel’s (QDEL) CEO Douglas Bryant said “Quidel has risen to the challenge of the COVID-19 pandemic, producing and shipping millions of tests to those with the greatest need by providing affordable rapid testing to tens of thousands of communities throughout the United States. Moving forward, we expect even greater success in augmenting our supply chains and production for our COVID-19 diagnostic products, resulting in $800 million or more in revenue in our final quarter of 2020.”
Quidel Corporation (NASDAQ: QDEL) frames itself as a company that develops, manufactures, and markets diagnostic testing solutions for applications in infectious diseases, cardiology, thyroid, women’s and general health, eye health, gastrointestinal diseases, and toxicology worldwide.
It offers Sofia and Sofia 2 fluorescent immunoassay systems; QuickVue, a lateral flow immunoassay products; and InflammaDry and AdenoPlus, point-of-care products for the detection of infectious and inflammatory diseases and conditions of the eye.
If you’re long this stock, then you’re liking how the stock has responded to the announcement. QDEL shares have been moving higher over the past week overall, pushing about 27% to the upside on above-average trading volume.
Quidel Corporation (NASDAQ: QDEL) generated sales of $201.8M, 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 15.5% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($72.6M against $183M, respectively).
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