Sometimes the best stocks to buy are those that provide the essential tools needed for others. Several "pick-and-shovel" COVID stocks have performed really well so far this year. However, in this Motley Fool Live video recorded on Dec. 3, 2020, Healthcare and Cannabis Bureau Chief Corinne Cardina and Fool.com writer Keith Speights discuss why investors shouldn't be too quick to buy these stocks.

Corinne Cardina: I want to talk about some pick-and-shovel stocks in this space. These are stocks that do not depend solely on the coronavirus vaccine itself, but they have some nice exposure to the upside, and they have strong business fundamentals if you take coronavirus vaccines out of the equation.

The reason that I want to talk about this is because it's the end of the year here; I've been looking at a stock screen from S&P that pulls out the stocks that have gone up the most in 2020 end-of-the-year stuff. Some of these really stuck out to me because they went up so much, and they are not in the headlines very much. Some of them are related to the cold chain that we've been talking about for these mRNA vaccine candidates. Keith, do you want to tell us a little bit about some of the pick and shovel stock here and tell us what a pick and shovel stock is?

Keith Speights: Well, first, the pick-and-shovel description goes back to the gold-mining days. Back during the gold-rush times. People from all over would flock to California and other places to go mine gold. But the common saying was that the people making the most money were those selling the picks and shovels to those going out to the hills to go mine. So that's where the expression came from. It's very true today too in a lot of different industries that sometimes it's the companies and businesses that provide the tools needed that make the most money.

In the case of the COVID race here, Owens & Minor (OMI 1.20%) is a company that has just done phenomenally well this year. Owens & Minor has made a ton of money selling PPE, the personal protective equipment, such as masks and things like that. Of course, there has been a huge demand for that with the pandemic going on.

Owens & Minor is an older company, not typically seen as this great growth story, but their stock has done really well. They've seen just an acceleration of growth as a result of the COVID pandemic. I think with the continued outbreaks and that things unfortunately are getting worse rather than better right now, I think Owens & Minor could still see a lot of sales increase for the next several months.

To me, the question on a stock like that is, what happens after the pandemic ends? In a post-pandemic world, I think Owens & Minor might return to being more boring stock that has been in the past instead of this fantastic growth story that has been in 2020.

Corinne Cardina: Absolutely. How about Cryoport (CYRX -0.14%)? Is that one you're familiar with?

Keith Speights: You know, I'm not extremely familiar with Cryoport. It's a small company -- market cap around two billion dollars.

They're involved in cold chain logistics, and that's become a really big deal with the advent of the messenger RNA vaccines from Pfizer particularly. What Cryoport does is they make liquid nitrogen dry vapor shippers, and so their entire focus is on cold chain storage and transportation. That's another stock that has done well, very well.

My concern again here is, don't bet too much on the coal requirements. Because again, I mentioned Moderna has figured this out and they don't have the same ultra-cold storage requirements that Pfizer's vaccine does.

But even Pfizer is working on developing a lyophilized, which it's a big word, it basically just means freeze-dried. But they're working on a freeze-dried powder version of their messenger RNA vaccine. They even think it could come out sometime next year. It doesn't require the frozen distribution and storage.

Some of these stocks, they're doing great now, but that could change next year. I wouldn't jump into them just because of their COVID connection. Look at the rest of their business. There are some other reasons to look at these stocks, but just don't assume that their high-flying ways of right now is going to necessarily continue indefinitely.

Corinne Cardina: Totally. Another pick-and-shovel area to look at is, of course, when you have vaccines, what are we talking about? We need needles.

In May, the government put in in order to a company that I've never heard of before called Retractable Technologies (RVP 0.81%). It is a very small stock at $356 million market cap. It actually doesn't make needles so much as it makes safety needle devices that prevents injuries. Its stock is up 600% year to date. So it's one of those that people heard about it, they jumped on it, it has been powering it up all year long.

But again, Keith, do you think that we need to look beyond the immediate vaccine landscape before investing in something like this?

Keith Speights: I do, Corinne. Also, I would caution investors to follow Warren Buffett's advice. Look at the moat of a company.

For example, you mentioned Retractable Technologies. They are not the only player in that market. Obviously, some of these companies are going to have some technological advantages over their competitors. But check those out, and before you jump into any of those stocks, make sure that they have some type of competitive advantage that's going to set them apart in what could very well become just a commoditized market over the long run.