Global financial markets were sawed this week, with Wall Street suffering the most crushing sell-out in about four months on January 27, as concerns about the outbreak of the corona virus in Wuhan, China grew.
The number of total confirmed cases in China increased to 4,515 from Tuesday onwards and this figure could continue to increase as the virus spread, according to the Chinese Health Commission, increases. There are 106 confirmed deaths from coronavirus, although none have been reported outside of China.
A small number of cases related to people traveling from Wuhan have been confirmed in more than 10 countries, including the United States, Canada, France, Japan and South Korea.
As the virus extends its reach, concerns about the potential impact on global travel are increasing. Related shares in the aviation, cruise, casino and hotel industries are already considerably lower.
Since January 21, Wynn Resorts (NASDAQ 🙂 and Las Vegas Sands (NYSE :), shares with major activities in China, fell 12.30% and 7.35% respectively. While United Airlines (NASDAQ 🙂 fell by 12.32% from January 21.
However, companies that produce safety equipment for high-risk workers and vaccines for infectious diseases are likely to win in the short term as the demand for these products increases.
Further escalation of the outbreak would stimulate an even greater need for safety equipment and vaccine development. In particular, here are 3 industry leaders who benefit:
1. Lakeland Industries: leading manufacturer of Hazmat suits
Lakeland Industries (NASDAQ :), based in Ronkonkoma, New York, makes infection control equipment such as fire-fighting and heat-protective clothing, disposable protective clothing, as well as chemical protective, cleanroom and hazmat suits.
The company has seen its shares rise by 27.6% since the news of the virus outbreak on January 21 sent shock waves across the financial markets. Tuesday with a market capitalization of $ 112.1 million.
The share reached a new 52-week high of $ 16.28 on Monday and enjoyed a similar peak at the end of 2014 amid panic over an outbreak of Ebola in Africa.
With the coronavirus threatening to become a complete epidemic, the demand for the products of this manufacturer of medical protective equipment could grow.
Its customers are mainly industrial companies and governments from 40 foreign countries, including China, the US, Canada and Europe. In addition, the supplier of protective clothing is a supplier of federal, provincial and local governments, such as the US Department of Defense, the US Department of Homeland Security and the Centers for Disease Control.
2. Alpha Pro Tech: Go-To Protective Face Mask Producer
Alpha Pro Tech (NYSE 🙂 is active from the protecting people, products and environments. Operating entirely in the US but supplying the global market, the company manufactures protective cleanroom suits, infection control equipment, and air filtration face masks that have become commonplace on the streets of China.
Shares have risen by no less than 62.8% since January 21. YTD and reached a 52-week high of $ 7.86 on Monday. The stock, which ended last night at $ 5.70, rose 66% in 2020 and has a valuation of $ 74.2 million. Like Lakeland, Alpha Pro Tech also rose at the end of 2014 due to concerns about the outbreak of Ebola in Africa.
After making his name during the SARS, Middle East Respiratory Syndrome (MERS) and Ebola outbreaks, Alpha Pro Tech has become the go-to name in times of global health crises. We have already seen that face mask shortages are more common throughout the world. There is also an increase in demand for eye protectors and shoe covers for health professionals in China who are exposed to infected patients.
3. Vir Biotechnology: Vaccine Prospects Drive Gains
Vir Biotechnology (NASDAQ 🙂 is a clinical immunology company that focuses on combining immunological insights with advanced technologies for the treatment and prevention of serious infectious diseases.
The San Francisco-based biotech company, which entered the market in October 2019, has increased by 30% since 21 January. The stock set at $ 21.31 yesterday with a market capitalization of $ 2.34 billion. Shares, which rose by nearly 70% YTD, climbed to a record high of $ 27.48 on Monday.
Vir Biotech is well positioned to take advantage of the coronavirus outbreak because it has four technology platforms that it uses to develop treatments for infectious diseases, including influenza and tuberculosis. Investors note that it is possible to develop a vaccine, since it has already provided antibodies to other coronavirus strains in the past.
