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The Second Wave Portfolio (DGX, RXMD, APT)

The second wave is already here, or it’s coming. The bridge to a vaccine will have to be lengthened a bit. If you live in the US, it’s hard to distinguish a second wave from the first wave because they are basically flowing together at this point – which won’t be the case for basically any other developed-world country in the northern hemisphere.

Saddled with a stunning degree of mismanagement, US investors can’t quite yet focus on new recovery stocks. Instead, it’s the same old basket of hi-tech solutions to life indoors and apart mixed with virus “coping” plays. Today, we look at a few stocks that fall into the latter category, including: Quest Diagnostics Inc (NYSE:DGX), Progressive Care Inc (OTCMKTS:RXMD), and Alpha Pro Tech, Ltd. (NYSEAMERICAN:APT).

Quest Diagnostics Inc (NYSE:DGX) 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. 

Its Diagnostic Solutions segment offers risk assessment services for the life insurance industry; and health information technology solutions for healthcare organizations and clinicians. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.

Quest Diagnostics Inc (NYSE:DGX) just 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.  

Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. Shares of the stock have powered higher over the past month, rallying roughly 11% in that time on strong overall action. 

Quest Diagnostics Inc (NYSE:DGX) managed to rope in revenues totaling $1.8B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -6.5%, 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 ($988M against $1.8B, respectively).

Progressive Care Inc (OTCMKTS:RXMD) is an interesting stock to put on this list. It’s on the OTC but actively pursuing a Nasdaq uplist. It has strong and growing sales. It has been performing well, with shares advancing more than 50% in the past few weeks.

The company represents itself as “a personalized healthcare services and technology company”. The company that has been strong on the top and bottom lines in the regional pharmacy services space. That said, perhaps the more interesting story here on the margin is its expansion in the COVID antibody testing space, recently moving from two for four counties in the virus battleground of south Florida.

Progressive Care Inc (OTCMKTS:RXMD) has been one of the most aggressive forces for increased antibody testing services in the Florida market, recently announcing an expanded antibody testing regional footprint to include Palm Beach County. The Company’s antibody testing service has been met with extremely strong demand at its Dade and Broward County locations, depleting testing kit inventories by over 90% through sales and on-site test administrations.

However, in a recent move, the company expanded its service into Orange county with its expanded PharmCo service in Orlando. “This move will create access to a wider base of customers, patients, and providers, and will provide much-needed room to grow for years to come,” remarked S. Parikh Mars, CEO of Progressive Care. “Both the small size and limited location surroundings of our Five Star location have been constraining our ability to grow in the dynamic Orlando market. In addition, the shift in brand designation to our widely recognized PharmCo brand will drive expanded market share potential and allow us to tap the huge potential we see in this market.”

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. However, shares have been in a very strong uptrend overall during the past month, up as much as 75% in that time.

Progressive Care Inc (OTCMKTS:RXMD) pulled in sales of $9.1M in its last reported quarterly financials, representing top line growth of 75.4%. The company has put up impressive numbers, with consolidated monthly gross sales across all locations during May totaling $3 million, representing year-over-year growth of 67%. It was 54% the month before, and 105% in March. And it was even better before the pandemic hit. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($705K against $7.5M, respectively). 

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 provides its products under the Alpha Pro Tech brand name, as well as under private labels. Its products are used primarily in cleanrooms; industrial safety manufacturing environments; health care facilities, such as hospitals, laboratories, and dental offices; pharmaceutical markets; and building and re-roofing sites. 

Alpha Pro Tech, Ltd. (NYSEAMERICAN:APT) distributes its products through a network of purchasing groups, distributors, and independent sales representatives, as well as through its sales and marketing force. 

APT also just joined the Russell 2000, which is a huge leap and implies some indexing flows from fund managers who have to own a piece of stocks in the index.

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.

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).

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. http://www.facebook.com/ben.rouss

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