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Virus Protection as an Investment Opportunity (CLX, HON, BLGO, MMM)

As we start to gain more ground in our collective battle against the COVID-19 pandemic, the role of personal protection equipment and supplies looms large as a major concept for investors active with capital and willing to mobilize that capital toward companies able to make a difference while delivering value to their shareholders.

While we seem to be rapidly progressing along the path of beating this bug, experts suggest that resources geared toward protection and disinfection will likely play an outsized role for an extended period as businesses strive to present a virus-free picture to patrons during the gradual and prolonged “reopening” process in front of us.

That suggests expectations from analysts will continued to favor outperformance from companies positioned to thrive on these factors at least through the end of 2020. In addition, as we start to see returning confidence, the threat will loom of a revitalization of concerns about a second wave of lockdowns in reaction to a new spike in COVID-19 cases.

That casts a clear spotlight on stocks in the PPE space as “go-to” hedges on any scares. Given that framework, some degree of exposure to these stocks is likely to persist until we have a very strong vaccine in place, which could be well into 2021.

We present four interesting options for PPE allocations here, including: Clorox Co (NYSE:CLX), Honeywell International Inc. (NYSE:HON), BioLargo, Inc. (OTCMKTS:BLGO), and 3M Co (NYSE:MMM).

Clorox Co (NYSE:CLX) bills itself as a company that manufactures and markets consumer and professional products worldwide.

We know that viral threats are neutralized by bleach, so the stock has been red hot over the past two months as investors flock to the branded leading source.

CLX operates through four segments: Cleaning, Household, Lifestyle, and International. The company offers laundry additives, including bleach products under the Clorox brand, as well as Clorox 2 stain fighter and color booster; home care products primarily under the Clorox, Formula 409, Liquid-Plumr, Pine-Sol, S.O.S, and Tilex brands; naturally derived products under the Green Works brand; and professional cleaning, disinfecting, and food service products under the CloroxPro, Dispatch, Clorox Healthcare, Hidden Valley, and KC Masterpiece brands.

It also provides charcoal products under the Kingsford and Match Light brands; bags, wraps, and containers under the Glad brand; cat litter products under the Fresh Step, Scoop Away, and Ever Clean brands; and digestive health products under the RenewLife brand.

In addition, the company offers dressings and sauces primarily under the Hidden Valley, KC Masterpiece, Kingsford, and Soy Vay brands; water-filtration systems and filters under the Brita brand; natural personal care products under the Burt’s Bees brand; and dietary supplements under the Rainbow Light, Natural Vitality, and Neocell brands. Further, it markets its products under the PinoLuz, Ayudin, Limpido, Clorinda, Poett, Mistolin, Lestoil, Bon Bril, Agua Jane, and Chux brands.

The company sells its products primarily through mass retailers, grocery outlets, warehouse clubs, dollar stores, home hardware centers, third-party and owned e-commerce channels, military stores, and distributors, as well as a direct sales force and medical supply distributors.

CLX hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Shares of the stock have powered higher over the past month, rallying roughly 7% in that time on strong overall action.

Clorox Co (NYSE:CLX) generated sales of $1.8B, 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 23.1% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($496M against $1.8B, respectively).

Honeywell International Inc. (NYSE:HON) bills itself as a company that operates as a diversified technology and manufacturing company worldwide. HON is also a major source of PPE on an international basis.

The Aerospace segment offers auxiliary power units, propulsion engines, integrated avionics, environmental control and electric power systems, engine controls, flight safety, communications, navigation hardware, data and software applications, radar and surveillance systems, aircraft lighting, advanced systems and instruments, satellite and space components, and aircraft wheels and brakes; spare parts; repair, overhaul, and maintenance services; thermal systems; and connected solutions and data services for the aftermarket, as well as wireless connectivity, and management and technical services.

The company’s Honeywell Building Technologies segment offers advanced software applications for building control and optimization; sensors, switches, control systems and instruments for energy management; access control; video surveillance; fire products; remote patient monitoring systems; e-cooling heat transfer agents; and installation, maintenance, and upgrades of systems.

Its Performance Materials and Technologies segment offers automation control, instrumentation, and advanced software and related services; catalysts and adsorbents, equipment, and consulting; and materials used to manufacture end products, such as bullet-resistant armor, nylon, computer chips, and pharmaceutical packaging, as well as Honeywell forge connected solutions.

The company’s Safety and Productivity Solutions segment provides personal protection equipment, apparel, gear, and footwear; gas detection technology; and cloud-based notification and emergency messaging; and mobile devices and software; supply chain and warehouse automation equipment, and software and solutions; custom-engineered sensors, switches, and controls; and software-based data and asset management productivity solutions.

The context here for the stock is a bit of a bid, with shares acting well over the past five days, up about 13% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 4% in that time on strong overall action.

Honeywell International Inc. (NYSE:HON) managed to rope in revenues totaling $8.5B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -4.7%, 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 ($8.8B against $17.4B, respectively).

BioLargo, Inc. (OTCMKTS:BLGO) is a more speculative stock on this list. But we include it here because it is quickly developing a reputation as an innovator in this battle, with a new product (produced by a subsidiary) that allows for 100% effective cleansing of N95 masks while they are being worn.

Given the shortage of masks among healthcare workers and frontline responders, this development is a possible game-changer that could have major implications for share prices. Hence, it deserves a strong mention here.

BioLargo, Inc. (OTCMKTS:BLGO) focuses on unique disruptive solutions to deliver clean air, clean water and a clean, safe environment (www.biolargo.com). BLGO has a deep and expansive R&D facet, with collaborations that read like a who’s who list of top teams, including UCLA, Shell Co, Suncor, Total, Epcor, NWRI, EREF, and a substantial list of top north American universities in the US and Canada.

The company’s engineering division features experienced professional engineers dedicated to integrity, reliability, and environmental stewardship (www.biolargoengineering.com). Its industrial odor control division, Odor-No-More (www.odornomore.com) features CupriDyne Clean Industrial Odor Eliminator (www.cupridyne.com), which eliminates the odor-causing compounds and VOCs rather than masking them, and is now winning over leading companies in the solid waste handling and wastewater industries and other industries that contend with malodors and VOCs.

BLGO’s subsidiary, BioLargo Water (www.biolargowater.ca), develops the Advanced Oxidation System “AOS,” a disruptive industrial water treatment technology designed to eliminate waterborne pathogens and recalcitrant contaminants with better energy-efficiency and lower operational costs than incumbent technologies.

And its subsidiary, Clyra Medical features effective and gentle solutions for chronic infected wounds to promote infection control and regenerative tissue therapy.

BLGO shares have been relatively flat over the past couple weeks, but up sharply on a slightly wider view as the stock has broken above some key resistance after releasing more information about its iodine-based disinfectant solution.

BioLargo, Inc. (OTCMKTS:BLGO) managed to rope in revenues totaling $537K in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 22.3%, 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 ($655K against $4.4M, respectively).

3M Co (NYSE:MMM) frames 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 Transportation & Electronics provides electronics, such as display materials and systems, electronic materials solutions; automotive, aerospace, and commercial solutions; advanced materials; and transportation safety products. This segment serves transportation and electronic original equipment manufacturer customers.

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

The Consumer segment provides home improvement, home care, and consumer health care products, as well as stationery and office supplies. This segment is also involved in the retail auto care business.

The company serves automotive, electronics and automotive electrification, appliance, paper and printing, packaging, food and beverage, construction, medical clinics and hospitals, pharmaceuticals, dental and orthodontic practitioners, health information systems, food manufacturing and testing, consumer and office retail, office business to business, home improvement, drug and pharmacy retail, and other markets.

And the stock has been acting well over recent days, up something like 7% in that time.

3M Co (NYSE:MMM) pulled in sales of $8.1B in its last reported quarterly financials, representing top line growth of 2.7%. 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. http://www.facebook.com/ben.rouss



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