In a recent piece, President and Founder of Stock Gumshoe, Travis Johnson attempted to decipher investor Alexander Green's tease on the “Coronavirus Recovery Package,” which is sold through the Oxford Club.
In particular, Green supposedly deems that by subscribing to the Oxford Club subscription plans, investors will in turn get a special report that identifies “The three biggest winners of the Coronavirus Recovery.” Johnson believes he may have figured out what these companies are.
Here’s what has been shared thus far:
For starters, Johnson believes that Green is focusing primarily on “winners” within the healthcare sector, as the latter disclosed that, “There are three ultra-cheap healthcare stocks I am recommending to Oxford Club Members right now.”
Company #1: FLGT
The first of the clues given by Green goes as follows: “The Genetic Testing Company That Just Came Out With a Coronavirus Test [and] Could Double in Value!” Green furthered disclosed that the firm is American, provides affordable genetic testing, its lab has been CLIA-certified and CAP-accredited and that a new test has been created based on next-generation sequencing (NGS).
With everything that was shared, Johnson argued that the first company had to be Fulgent Genetics (FLGT). Here’s what has since been provided regarding FLGT:
- It has been around for decades and performed poorly up until mid-2019
- It is on the verge of profitability on a GAAP basis
- It is small firm with a solid balance sheet and no net debt
- More time is needed to see how COVID-19 will affect FLGT’s financials
Johnson further argued that if Green was right about this stock, then one can look at a forward Prices to Earning (PE) of 16, which he deems is reasonable based on the firm’s growth.
Company #2: QDEL
The next company that might have made it to Green’s list is considered as another testing company. Green was referenced stating how consumers with a healthy immune system are more likely to fight off COVID-19. He reasoned that the second company of choice, one that is a leader in diagnostic healthcare, has the ability to identify those with medical conditions and help bring down the death rate.
He went on to share that the firm creates immunoassay tests that address a number of viruses and flus. Some of these include, “adenoviruses, Bordetella, C.diff, strep, HSV, flu, hMPV….”
With everything shared regarding this firm, Johnson trusts that it might a company called, Quidel (QDEL). The following is a breakdown of the suggested company:
- It has been growing significantly in the past couple of years
- It was able to resist the effect of COVID-19 for the most part
- It is larger than Fulgent in terms of market cap with over $500 million in annual revenue
- Existing analysts have estimated that QDEL might grow by 5% every year between 2019 and 2022
Company #3: NVCR
Green describes the final company as a “cancer-fight company likely to be a 10-bagger moving forward.” Other disclosed information are: the firm is based in St.Helier, sells a medical device that uses low-voltage fields to treat cancer, the technology has passed clinical trials, FDA has approved it, a tumor treatment system was introduced in 2011 for glioblastoma, and the device is currently sold in a number of countries.
The last company teased, according to Johnson, is NovaCure (NVCR). NovaCure is known:
- As a pioneer in “Tumor Treating Fields”
- Its stock has gone up by 30% amidst the pandemic
- It has a market cap of $6 billion
- If the technology used is accepted, serious growth can be expected in the long run
- Revenue has grown, and margins have improved
- R&D costs have been covered
One thing that the Founder of Stock Gumshoe is not certain of, in regard to this pick, is the fact that most firms within this respective industry won’t be wrapping up their trials until 2022, so anything can happen at 2 years from now.
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