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Stocks to Watch Ahead of the “Twindemic” (APT, LAKE, ALST, DGX)

The pandemic is old news. Scientists and health policy experts are now worried about the rising potential for the “Twindemic” – a coincident crisis involving Covid-19 and influenza primed for emergence this fall as people worry about going to the doctor to get their flu shot.

Without widespread adoption of flu shots, the flu could be much worse. If that happens, our already compromised immune systems will be sitting ducks for the much-feared “second wave” jump in Covid-19 cases possible this fall.

For many people, the only obvious strategy may be more effective personal protection equipment and widespread testing.

With that in mind, we look at several stocks primed for potential as markets adjust to the twindemic scenario, including: Alpha Pro Tech, Ltd. (NYSE:APT), Lakeland Industries, Inc. (NASDAQ:LAKE), Allstar Health Brands Inc (OTCMKTS:ALST), and Quest Diagnostics Inc (NYSE:DGX).

 

Alpha Pro Tech Ltd (NYSE:APT) engages in developing, manufacturing, and marketing a line of 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 (NYSE:APT) 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.”

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

Alpha Pro Tech Ltd (NYSE: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).

 

Lakeland Industries Inc (NASDAQ:LAKE) bills itself as a company that 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.

The company also provides reusable woven garments, including electrostatic dissipative apparel for electric and gas utilities; flame resistant meta aramid, para aramid, and FR cotton coveralls/pants/jackets used in petrochemical and refining operations; FR fabrics; and cotton and polycotton coveralls, lab coats, pants, and shirts. In addition, it provides high visibility clothing comprising reflective apparel, including vests, T-shirts, sweatshirts, jackets, coats, raingear, jumpsuits, hats, and gloves; and gloves and sleeves that are used in the automotive, glass, and metal fabrication industries.

Lakeland Industries Inc (NASDAQ:LAKE) just recently announced that it has established a new credit facility with Bank of America.

According to the release, the new facility consists of a senior secured $12.5 million revolving credit facility, which includes a $5 million letter of credit sub-facility and an option to convert up to $5 million of the revolving credit facility into a term loan facility. The facility also includes an accordion feature under which the Company may request from time to time an increase in the revolving commitment of up to $5 million (for a total commitment of up to $17.5 million). The facility will mature on June 25, 2025. Terms of the new facility are more completely discussed in the Company’s Form 8-K filed with the Securities and Exchange Commission.

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 6% in that timeframe. LAKE shares have been relatively flat over the past month of action, with very little net movement during that period.

Lakeland Industries Inc (NASDAQ:LAKE) managed to rope in revenues totaling $45.6M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 84.7%, 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 ($23.5M against $12.9M).

 

Allstar Health Brands Inc (OTCMKTS:ALST) is dedicated to improving health and quality of life by offering select products, including medical devices, nutritional supplements, over the counter remedies and medicines across the Americas and Europe.

AllStar’s goal is to bring additional products to the market and provide new, innovative options for better health and well-being. In addition, according to recent materials, the company has begun to focus sharply on front-line products. AllStar is now working with qualified overseas suppliers to provide products such as PPE (Personal Protective Equipment) as demand is expected to increase sharply with the gradual re-opening of the economy.

Allstar Health Brands Inc (OTCMKTS:ALST) also just recently announced the signing of a new distribution agreement for Mexico and other Latin American countries through TPT Global Tech’s partner New Orbit Technologies.

Dr. Daniel Bagi, President of AllStar, observed,” Given the increasing Covid-19 infection rates around the world, especially in Mexico, Peru and other Latin American countries and the ability to set up the QuikLAB testing modules at almost any location, we believe countries like Mexico will avail themselves of this testing option. The QuikLab modules can be set up outside malls, at mining sites or other remote locations, and are accessed as drive-up testing. They offer a fast, complete testing option, at a rapid throughput, – up to 50 tests/hour, using either the viral or antibody tests currently available on the market. The goal is to provide results the same day, so appropriate treatment or isolations protocols can be put in place based on the results of the testing.”

According to the release, AllStar will provide FDA EUA rapid Covid-19 anti-body tests in concert with TPT Medtech QuikLab solutions to promote the best in class mobile testing solutions throughout Latin America. This innovative solution, including supply chain utilizing testing suppliers globally and North America, ensures a steady supply chain able to meet demand as infections surge across different locations.

Allstar Health Brands Inc (OTCMKTS:ALST) has limited cash on the books against some more significant obligations. ALST is pulling in trailing 12-month revenues. While this is the more speculative name in this group, the company’s engagement in the PPE and antibody testing space as virus numbers continue to ramp across the US should put ALST on a lot of radars.

 

Quest Diagnostics Inc (NYSE:DGX) promulgates itself as a company that provides diagnostic testing information and services in the United States and internationally. The company’s Diagnostic Information Services business segment develops and delivers diagnostic testing information and services, such as routine testing, non-routine and advanced clinical testing, gene-based and esoteric testing, anatomic pathology, and other diagnostic information services.

This segment offers diagnostic information services primarily under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, Athena Diagnostics, ExamOne, and Quanum brands to patients, clinicians, hospitals, integrated delivery networks, health plans, employers, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile paramedics, nurses, and other health and wellness professionals.

Quest Diagnostics Inc (NYSE:DGX) recently announced that it has received emergency use authorization (EUA) from the U.S. Food and Drug Administration (FDA) to use specimen pooling with its proprietary molecular diagnostic test for COVID-19.

Quest is the first lab provider to receive FDA authorization for the technique for COVID-19 testing in the United States.

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.

Quest Diagnostics Inc (NYSE:DGX) pulled in sales of $1.8B in its last reported quarterly financials, representing top line growth of -6.5%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($988M against $1.8B, respectively).

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