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The Next Wave in Covid Coping Stocks (LAKE, APT, ALST, MMM)

The COVID-19 pandemic has changed the world as we know it. The result of this transition, for investors, is a new playing field that rewards the nimble and those able to think thematically. 

One of the most interesting and important themes as the virus rages on is centered on the resources we need to cope until we have a viable vaccine able to be widely distributed around the world

With that in mind, we take a look at some of the more interesting stocks aligned with this theme, including: Lakeland Industries, Inc. (NASDAQ:LAKE), Alpha Pro Tech, Ltd. (NYSEAMERICAN:APT), Allstar Health Brands Inc (OTCMKTS:ALST), and 3M Co (NYSE:MMM)

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. 

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

According to the release, 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.

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 5% in that time on strong overall action. 

Lakeland Industries, Inc. (NASDAQ:LAKE) generated sales of $45.6M, 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 61.7% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($23.5M against $12.9M).

Alpha Pro Tech, Ltd. (NYSEAMERICAN: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. (NYSEAMERICAN:APT) that the Company is set to join the broad-market Russell 3000® and Russell 2000® Indexes at the conclusion of the 2020 Russell indexes annual reconstitution, effective after the US equity market opens on June 29, 2020, according to a preliminary list of additions posted on June 5, 2020. The Company is currently included in the Russell Microcap® Index.

According to the release, the 2020 reconstitution of the Russell indexes captures the 4,000 largest US stocks as of May 8, 2020, ranking them by total market capitalization. Membership in the US all-cap Russell 3000® Index, which remains in place for one year, means automatic inclusion in the small-cap Russell 2000® Index, as well as the appropriate growth and value style indexes. FTSE Russell determines membership for its Russell indexes primarily by objective, market-capitalization rankings and style attributes.

And the stock has been acting well over recent days, up something like 20% in that time.

Alpha Pro Tech, Ltd. (NYSEAMERICAN:APT) generated sales of $18.2M, 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 66.2% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($17.6M against $10.5M).

Allstar Health Brands Inc (OTCMKTS:ALST) trumpets itself as a specialty Health Care Products Company 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 an order for Covid-19 Rapid Antibody tests for sales in Florida. The demand for these types of test kits which can deliver results in minutes may help with managing the recent uptick of new infections in Florida and other states as well.

Dr. Daniel Bagi, President of AllStar stated,” The recent uptick in new coronavirus cases in many states, and especially in Florida is a troubling statistic. We are working with local distributors to offer clinics and hospitals more access to these rapid antibody tests. As the acceptance of these types of tests take hold, we expect an increase in the volume and frequency of these orders.

AllStar has already begun distributing protective masks and is expanding its product line to include gowns and gloves to established businesses and various types of medical clinics such as optometrists, long-term care facilities and hospitals. As such, first-order deliveries of the Covid-19 IgG/IgM antibody rapid test have already been made to a Distributor for the Caribbean and Latin American region, and US delivery is in process. In addition, KN 95 protective masks, – the functional equivalent of the N 95 mask – have been sold already in Canada and AllStar is also working to deliver the much-needed masks to other countries.

Allstar Health Brands, Inc. was formerly known as Axxess Pharma, Inc. and changed its name to Allstar Health Brands, Inc. in June 2017. The company was founded in 1997 and is headquartered in Toronto, Canada.

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 space as virus numbers swell could shift this picture dramatically in future filings.

3M Co (NYSE:MMM) bills itself as a company that develops, manufactures, and markets various products worldwide. It operates through four business segments: Safety & Industrial, Transportation & Electronics, Health Care, and Consumer. 

The Safety & Industrial segment offers personal safety products, adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket, and roofing granules. 

The Health Care segment offers medical solutions, oral care, separation and purification sciences, health information systems, drug delivery systems, and food safety products. 

3M Co (NYSE:MMM) announced that it has created resources to fight fraud, filed 18 lawsuits and removed thousands of deceptive websites and social media posts to stop pandemic profiteers.

According to a recent release, 3M is sharing results of the global efforts the company launched in March to combat fraud connected to the COVID-19 pandemic. 3M has worked with law enforcement authorities and partnered with ecommerce and technology companies to help protect the public against those exploiting the demand for critical 3M products.

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.

3M Co (NYSE:MMM) managed to rope in revenues totaling $8.1B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 2.7%, 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 ($4.5B against $9.1B, respectively).

Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing.

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