The Wall Street Journal ran an interesting article earlier this week pointing out the growing consensus view that the Covid-19 pandemic crisis is not set to simply go away. Rather, it is set to morph into a chronic low-grade pandemic that might be with us for a long time to come.
The virus will hide out in the dark corners of the world, mutate, and come raging back from time to time. And we will need to develop coping strategies and tools and resources that allow humankind to manage to maintain some semblance of normality in the shadow of its constant threat.
And to do that, we will need to keep investing in personal protection equipment, testing kits, air filtration technology, and vaccine modification processes and methods that add up to a constant barrier supporting that new-normal normality.
With that in mind, here are a few of the more interesting and active names that will contribute to the industrial tools involved in this emerging pandemic defense system: Lakeland Industries Inc (NASDAQ:LAKE), Allstar Health Brands Inc (OTCMKTS:ALST), and Alpha Pro Tech Ltd (NYSEAMERICAN:APT).
Lakeland Industries Inc (NASDAQ:LAKE) manufactures and sells industrial protective clothing and accessories for the industrial and public protective clothing market worldwide. This is the dead-center target zone for the idea of a vaccine-less pandemic spike at this stage because it implies a scramble for limited supplies of protective gear. And LAKE represents a pure-play stock in that narrative.
The company 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 recently announced financial results for its fiscal 2021 second quarter ended July 31, 2020, including net sales for 2Q21 of $35.0 million, up 27.5% as compared with 2Q20 of $27.5 million, gross profit for 2Q21 of $17.3 million, compared with 2Q20 of $10.4 million, and gross margin as a percentage of net sales in 2Q21 of 49.5%, compared to 37.9% in 2Q20.
Charles D. Roberson, President and Chief Executive Officer of Lakeland Industries, stated, “Our Company has just set a new standard of excellence for PPE manufacturers anywhere in the world. Following our fiscal 2021 first quarter that was extraordinary with record setting financial results, we just exceeded that as measured by key performance measures. Against a backdrop of very challenging times, I am very proud of the efforts and achievements of our global team. We are delivering for our existing and new customers alike, our shareholders, and, perhaps most importantly, for the health and safety of people around the world as we all contend with the continued COVID-19 pandemic.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 27% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 31% in that time on strong overall action.
Lakeland Industries, Inc. (NASDAQ:LAKE) managed to rope in revenues totaling $41.5M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 50.9%, 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 ($40.2M against $17.3M).
Allstar Health Brands Inc (OTCMKTS:ALST) has partnered 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) also recently provided a corporate update to outline its core objectives for 2021. Central for the company appears to be its focus on continuing to provide testing and PPE given the likelihood of a long and drawn-out battle as new strains emerge and different regions effect different levels of response.
Dr. Daniel Bagi, CEO of AllStar, remarked,”We believe a key factor to success in the tourism and other sectors is cutting the time for a PCR test result (still the gold standard) from several days to a few hours. This alone can be the difference for a tourist between several days of quarantine or only a few hours and could impact greatly on their decision whether to travel or not. AllStar has been focusing its efforts on working with several countries and offering solutions to satisfy their testing needs.”
The company also notes that it continues to expand on the efforts made initially in Jamaica and is in discussions with several other Caribbean Island and some African countries in developing testing and reporting systems to re-open their hard-hit tourism sectors, while also satisfying the requirements for these tourists to return home.
“The solutions include same-day testing, whether a simple Antigen test or the more complex PCR test, which in some countries now is a requirement before returning home, but also up until now very time consuming. Our goal is to offer same-day results, sometimes within a couple of hours of sample collection. This would relieve much of the testing burden and offer testing solutions for tens of thousands of people per day,” concluded Dr. Bagi.
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.
Alpha Pro Tech Ltd (NYSEAMERICAN:APT) is another pure-play stock positioned at the heart of the PPE theme. The company sells disposable protective apparel, building supply products, and infection control products in the United States and internationally. The company operates through three segments: Building Supply, Disposable Protective Apparel, and Infection Control.
APT 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) recently announced that its Board of Directors has authorized a $5.0 million expansion of the Company’s existing share repurchase program. According to the release, with this authorized expansion, the Company now has approximately $7.0 million available to repurchase shares of the Company’s common stock, $2.0 million of which remains from the previous expansion, most recently announced in December 2019.
Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, “Our record revenue growth and cash flow generation through the first six months of 2020, in conjunction with the expectation of strong operating results for the remainder of this year based on continued high demand for our products driven largely by the COVID-19 pandemic, facilitated this decision by our Board of Directors. We believe that re-activating and expanding our share repurchase program at this time will deliver value to our shareholders.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 12% in that timeframe. Alpha Pro Tech Ltd (NYSEAMERICAN:APT) managed to rope in revenues totaling $30M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 149.7%, 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 ($24.8M against $8.1M).
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