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Coronavirus Diagnostic Tests in High Demand: 4 Stocks in Focus

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Major indices like the Dow Jones Industrial Average, NASDAQ Composite Index, London-based Financial Times Stock Exchange Group and the Nikkei are on a rollercoaster ride since the coronavirus outbreak. While the spread of the virus is showing no sign of abatement, investors are seemingly jittery about the macro situation and are gradually foregoing interest in the stock market.

Meanwhile, IMF's projection of a 3% contraction in global GDP this year is adding to the grim. On Jun 1, the Congressional Budget Office, in its May 2020 report, stated that the U.S. economy could shrink by $15.7 trillion over the next decade. Given this, market watchers want the administration to take urgent steps to mitigate the economic damages from the coronavirus.

Meanwhile, the stock market has been showing no signs of recovery since Jun 15 when the Fed announced plans of buying individual corporate bonds. The impact of this on the U.S. economy is yet to be seen.

MedTech Scenario

Most medical device companies across various domains reported huge revenue losses in the first quarter of 2020. Due to uncertainty regarding the impact and extent of the pandemic, most leading companies slashed or withdrew their guidance for the full year.

However, while growth has taken a backseat for most of the medical device sectors now, there are a few branches which have been contributing significantly to the fight against the virus. Diagnostic Testing is undoubtedly one such profitable bet.

Molecular Diagnostic Testing for Coronavirus

Given the current testing requirements across the world, the diagnostic testing business for COVID-19 is rapidly evolving and improving in quality every day. Many tests are now focused on diagnosing patients with active viral infections. Such is the global demand for testing that the FDA has granted Emergency Use Authorization (EUA) to some of the major players which are working tirelessly to bring more tests to the market.

The increasing demand for diagnostic testing to detect the presence of the virus is contributing to growth of the molecular diagnostic business globally. Major players are reaping the benefits of an expanding business, some of which are discussed below.

4 Stocks to Watch

Here we have shortlisted four stocks which have enormous prospects in the diagnostic testing space with their COVID-19-specific innovations. These companies currently carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and have outperformed their respective industries in recent times. You can see the complete list of today’s Zacks #1 Rank stocks here.

Listed below are four companies that investors can keep an eye on during the grim economic scenario.

Abbott Laboratories (ABT - Free Report) has been working toward obtaining the FDA’s EUA for its molecular tests for coronavirus. This Zacks Rank #2 company has received several EUAs within a span of just two months. It received EUA for its coronavirus molecular test for use on its new Alinity m molecular laboratory instrument in May. Earlier in the same month, the company received EUA for its SARS-CoV-2 IgG lab-based serology blood test on the Alinity i system. The company is currently aiming to reach the capacity for shipping around 60 million antibody tests globally across its ARCHITECT and Alinity i platforms in June. In April, the company rolled out its third COVID-19 test, which is a serology blood test for the detection of the antibody, IgG, on its lab-based immunoassay testing platforms. The stock has gained 6.7% against the 6.6% fall of its industry over the past year.



 

Illumina, Inc. (ILMN - Free Report) received EUA for its COVIDSeq Test, leading the way for large-scale next-generation sequencing-based (NGS) testing for coronavirus. The Zacks Rank #3 launched the SARS-CoV-2 Data Toolkit in April, which is a new suite of data analysis tools and workflow functionality for researchers working on the virus using NGS. The stock has gained 41.8% compared with 28.2% growth of its industry over the past three months.


 

Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp was the first commercial lab to launch polymerase chain reaction (PCR) testing on Mar 5, just after the FDA relaxed the rules around EUA for testing. Further, it launched the LabCorp COVID-19 at-home test Collection Kit on Pixel by LabCorp platform, the first at-home collection kit to receive EUA in May. In the same month, the company announced the online availability of its COVID-19 Immunoglobulin G (IgG) antibody test. Also in the month, LabCorp in partnership with Roche announced the availability of its Elecsys Anti-SARS-CoV-2 antibody test at more than 20 commercial and hospital lab sites throughout the United States.

The Zacks Rank #2 company has gained 40.2% compared with 28.1% growth of its industry over the past three months.


 

QIAGEN N.V. (QGEN - Free Report) started shipping its new QIAstat-Dx Respiratory SARS-CoV-2 Panel test in the United States to help diagnose coronavirus-infected patients in March. The EUA for the test was received at the end of the month. The release of the test kits was preceded by the announcement of QIAGEN receiving funding for the project in part from the U.S. Department of Health and Human Services' Office of the Assistant Secretary for Preparedness and Response; Biomedical Advanced Research and Development Authority Division of Research, Innovation, and Ventures.

The Zacks Rank #1 company has gained 2.7% against the 3.3% fall of its sector over the past six months.


 

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

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