Covid Testing Stocks To Watch As The Holidays Near
Our indicative theme of Covid-19 Testing Stocks, which includes medical devices and diagnostic companies that are involved in Covid-19 testing – is up by about 69% year-to-date, significantly outperforming the S&P 500 which is up by about 8% over the same period. Testing is viewed as key to containing the spread of the Coronavirus pandemic and re-opening the economy until a safe and effective vaccine is developed. It’s likely that the demand for testing products and services is likely to rise with the coming holiday season. For example, as travel picks up, testing is likely to be key to improving confidence for passengers while potentially helping to reduce quarantine restrictions. Within our theme, Quidel (NASDAQ: QDEL) has been the strongest performer gaining about 260% year-to-date, while Quest Diagnostics, up about 11%, was the weakest performer. Below is a bit more about these companies.
Quidel is a company that sells diagnostic healthcare products including rapid diagnostic testing solutions, cellular-based virology assays, and molecular diagnostic systems. The company doubled down on the Covid-19 testing over the last two quarters, and its stock is up a solid 261% this year.
Hologic sells medical devices for diagnostics, surgery, and medical imaging. The company currently has two molecular diagnostic tests for Covid-19 including the Panther Fusion and Aptima tests. The stock is up by about 31% year-to-date.
Abbott Laboratories has a diverse range of solutions including a test called BinaxNOW that provides test results in 5 minutes and works without relying on lab equipment. The stock is up by about 29% year-to-date.
Laboratory of America operates one of the largest clinical laboratory networks in the world. While the company’s general diagnostic business proved a mixed bag over the last two quarters as doctors’ visits declined due to the pandemic, it has scaled up the capacity and accessibility for Covid-19 tests. The stock is up by 14% year-to-date.
Quest Diagnostics is one of the largest U.S. diagnostics chains that has been impacted by the pandemic, the company’s large-scale Covid-19 testing has compensated for this to an extent. The stock is up by 11% year-to-date.
What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio to beat the market, with over 100% return since 2016, versus about 50% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.
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