Please ensure Javascript is enabled for purposes of website accessibility

Why Alpha Pro Tech, Co-Diagnostics, and Inovio Pharmaceuticals Are on Fire Today

By George Budwell - Mar 12, 2020 at 8:45AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

These three healthcare stocks are surging this morning after another day of bad news regarding the SARS-CoV-2 pandemic.

What happened

Shares of Alpha Pro Tech, Ltd. (APT 3.53%), Co-Diagnostics, Inc. (CODX 0.40%), and Inovio Pharmaceuticals, Inc. (INO -4.57%) are all poised for another monstrous day. In pre-market trading Thursday morning, Alpha Pro Tech's shares jumped by 28.7%, Co-Diagnostics' stock popped by 16%, and Inovio Pharmaceuticals' equity added another 16.2% to its recent tally. 

So what

All three of these names have been skyrocketing this year in response to the outbreak of SARS-CoV-2, the virus that causes COVID-19. Shares of the protective apparel company Alpha Pro Tech are now up by 232% for the whole of 2020 due to surging demand for its face masks. Co-Diagnostics' stock has appreciated by a whopping 1,370% this year, thanks to its molecular diagnostic kit for SARS-CoV-2. And Inovio Pharmaceuticals' shares are set to breach the 200% gain mark for 2020 as a result of its experimental vaccine candidate, INO-4800, indicated as a preventative measure against this deadly respiratory ailment. 

A tiny globe wearing a face mask with the word "coronavirus" written on it.

Image source: Getty Images.

Now what

Are these jaw-dropping moves in these three healthcare stocks justified? Alpha Pro Tech and Co-Diagnostics are both on track to experience a sizable financial windfall from this global pandemic. How much of a windfall remains to be seen, but there is a solid fundamental reason behind their surging share prices this year. That said, it's basically impossible to predict how this story plays out.

The U.S. government is now estimating that anywhere between 70 million to 150 million Americans could become infected with this virus once everything is said and done. If that line holds true and this virus doesn't subside as summer rolls in, Alpha Pro Tech and Co-Diagnostics might evolve into bona fide jackpot stocks (stocks that produce life-changing gains due to an unexpected turn of events).   

Inovio Pharmaceuticals is much harder to forecast, however. The company does have some stiff competition in the race to develop a vaccine for COVID-19. What's more, the most optimistic estimate has a vaccine being available for widespread use in 18 months from now. A more typical time frame to trial an experimental vaccine of any kind, though, is anywhere from four to eight years.

That's not a knock against Inovio Pharmaceuticals, but simply the harsh reality of vaccine development in general. Rushing an unproven vaccine out the door to combat an emerging pandemic, after all, could have serious unintended consequences. In short, investors might want to take a cautious approach with this name in the wake of its recent rally.  

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Inovio Pharmaceuticals, Inc. Stock Quote
Inovio Pharmaceuticals, Inc.
$1.88 (-4.57%) $0.09
Co-Diagnostics, Inc. Stock Quote
Co-Diagnostics, Inc.
$4.99 (0.40%) $0.02
Alpha Pro Tech, Ltd. Stock Quote
Alpha Pro Tech, Ltd.
$4.40 (3.53%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.