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The Big Picture for Virus Testing Stocks (FLGT, ALST, CODX)

The good news is that the end of the pandemic is in sight. The bad news is that it may never really be over.

Even after we achieve the big goal of vaccine-induced herd immunity in the developed world, the pandemic will fester and mutate and hide out in the emerging world, continuously threatening from the shadows. While we appear on the verge of knocking out the scary version of this story – all but eradicating fatalities and hospitalizations where vaccines are widely available – the path will be difficult and longer than we may have hoped, and testing technology will remain key.

As such, investors may benefit from holding some exposure to stocks that have pure-play penetration in the virus testing technology space. With that in mind, we take a look at a few of the more interesting names in the testing marketplace, including: Fulgent Genetics Inc (NASDAQ:FLGT), Allstar Health Brands Inc (OTCMKTS:ALST), and Co-Diagnostics, Inc. (NASDAQ:CODX).

 

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 Company has extended its partnership with the New York City Department of Education (or “NYC DOE”) and NYC Health + Hospitals for COVID-19 testing through the remainder of the 2021 school year. The contract was awarded after a competitive process where Fulgent demonstrated its COVID-19 testing capabilities, including its accurate and reliable test offerings, easy to use reporting systems and fast turnaround times.

“We have been working with the teams in New York City over the last several weeks, which has been going extremely well. The ongoing success of our COVID-19 testing program is a major testament to the hard work of the teams in New York City and the Fulgent staff involved in the project,” said Brandon Perthuis, Fulgent’s Chief Commercial Officer.

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 123% in that timeframe.

Fulgent Genetics Inc (NASDAQ:FLGT) managed to rope in revenues totaling $101.7M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 883%, 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 ($74.9M against $57.7M).

 

Allstar Health Brands Inc (OTCMKTS:ALST) is perhaps the most interesting name here because it hasn’t priced in anything here and has a very interesting and unique angle on providing much-needed testing solutions.

This 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.

Allstar Health Brands Inc (OTCMKTS:ALST) most recently announced an update on its diverse lines of business, including its latest efforts in the battle against the novel coronavirus SARS-CoV-2, the virus that causes COVID-19. AllStar Health Brands is seeing growing adoption and uptick in interest from current and new end-users for its diagnostic test kits for COVID-19, both for its antibody and its PCR tests, expecting an upward trend in sales in 2020 and 2021. Additionally, the Company is seeking to expand into the antigen test market.

“We’re unfortunately seeing rapid spreading of the coronavirus, with 42 states showing increases last week compared to prior week,” said Dr. Daniel Bagi, President of AllStar Health Brands. “Diagnosing the virus as quickly and as efficiently as possible will be a critical element to fighting this, particularly as a viable vaccine or therapeutic treatment appears to still be many months away from being broadly available to the general public.”

Allstar Health Brands Inc (OTCMKTS: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.

 

Co-Diagnostics, Inc. (NASDAQ:CODX) develops, manufactures and markets a state-of-the-art diagnostics technology. The Company’s technology is utilized for tests that are designed using the detection and/or analysis of nucleic acid molecules (DNA or RNA). The Company also uses its proprietary technology to design specific tests to locate genetic markers for use in industries other than infectious disease and license the use of those tests to specific customers.

The company intends to manufacture and sell reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules. It also intends to sell diagnostic equipment from other manufacturers as self-contained lab systems.

Co-Diagnostics, Inc. (NASDAQ:CODX) recently announced that it has completed its submission to the U.S. Food and Drug Administration (FDA) for an Emergency Use Authorization (EUA) of its Logix Smart™ SARS-CoV-2 DS (Direct Saliva) test, a COVID-19 polymerase chain reaction (PCR) diagnostic designed to detect the presence of SARS-CoV-2 in human saliva samples without first requiring RNA extraction of the sample.

“Our new extraction-free saliva test has been developed as part of our ongoing commitment to providing improved COVID-19 diagnostics for high-throughput laboratory settings, using technology with additional potential point-of-care applications,” said Dwight Egan, Co-Diagnostics CEO.

If you’re long this stock, then you’re liking how the stock has responded to the announcement. CODX shares have been moving higher over the past week overall, pushing about 22% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 58% in that time on strong overall action.

Co-Diagnostics Inc (NASDAQ:CODX) generated sales of $21.8M, 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 -9.2% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($27.3M against $1.8M).

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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