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3 Medical Stocks Poised to Trounce Market on Coronavirus Scare

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The coronavirus pandemic has rattled global markets, causing sharp drawdowns. And with the phase I clinical trial for the COVID-19 vaccine only being initiated this week, chances of getting any quick solution are bleak.

This uncertainty is sending jitters across most markets, Medical being no exception. Thanks to the dismal performance of U.S. medical device stocks over the past three weeks, the S&P 500 index is sinking further.

Shares of MedTech stalwarts have been depreciating, including Medtronic (MDT - Free Report) losing 6.7% and Boston Scientific (BSX - Free Report) declining 4.6% during this time period. Overall, in the past month, the Dow Jones U.S. Select Medical Equipment Index has plunged a significant 10.6%. The picture only got grimmer, thanks to disruptions in the global supply chain, resulting in a number of MedTech firms slashing their first-quarter and full-year 2020 outlooks. This state of freefall is spooking investors further.

Is There Any Silver Lining?

Nevertheless, even amid this mayhem across the globe, investors have some good news to look up to. Ever since coronavirus has taken shape as a pandemic, a handful of medical stocks have been displaying stellar growth.

We are particularly talking about diagnostic testing laboratories, RNA extraction kits providers, Telemedicine makers or BioTech companies, which have made noticeable progress with respect to their COVID-19-related products in the last two months.

For example, demand for diagnostic testing kits has reached a record high over the past three weeks. Testing laboratories worldwide are struggling to keep up with this accelerating pace due to lesser supply of test kits. In this regard, we may take the case of the London Stock Exchange’s AIM-listed Novacyt, an international specialist in clinical diagnostics and the maker of the recently-rolled out Primedesign diagnostic test for coronavirus. Going by a proactiveinvestors article, Novacyt “reported unprecedented interest in its coronavirus test, with 33,000 tests already ordered and requests for quotations from over 30 countries in three weeks since it launched the diagnostic at the start of February.” In the past week, shares of the company have appreciated 20.9% on skyrocketing demand for this test.

3 Medical Stocks Riding High on Coronavirus Scare

In light of the above discussion, we have shortlisted three medical stocks that have shown early signs of outstanding growth, banking on the turbulent situation, and have solid potential to excel in the months to come.

QIAGEN N.V. (QGEN - Free Report) : The company has been witnessing elevated demand for its RNA extraction kits, which are used as part of workflows to detect nucleic acid from SARS-CoV-2 — the novel coronavirus causing COVID-19. The company yesterday announced its plans to ramp up the global production capacity of this kit to support more than 6.5 million patient tests a month by the end of April and more than 10 million patient tests a month by the end of June. Shares of this Zacks Rank #2 (Buy) company have rallied 9% over the past three weeks, as against the 18.8% decline of the S&P 500 index.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Moderna, Inc. (MRNA - Free Report) : This Zacks #2 Ranked stock appreciated 24.4% on Mar 16, following the initiation of its first human clinical study related to coronavirus. Moderna announced that it has dosed the first patient in a phase I study, evaluating its mRNA-based vaccine candidate, mRNA-1273, against the novel coronavirus (SARS-CoV-2). This is the first study evaluating any of the company’s mRNA-based vaccine against the coronavirus infection. The study is being conducted by the National Institutes of Health (NIH). Shares of the company have gained 1.5% in three weeks’ time.

Hologic, Inc. (HOLX - Free Report) : Being the first company to receive the U.S. Department of Health and Human Services’ Biomedical Advanced Research and Development Authority’s (BARDA) aid for developing the coronavirus detection test, the Hologic stock has grabbed investors’ attention.  Earlier this week, the company announced the receipt of the FDA’s Emergency Use Authorization (EUA) for its latest molecular diagnostic test — Panther Fusion SARS-CoV-2 assay. Notably, the test detects SARS-CoV-2. Although this Zacks Rank #3 (Hold) stock has underperformed the S&P 500 index over the past three weeks, it is expected to rebound any time soon.

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