The coronavirus from China has ravaged many stocks, but a handful of companies are actually set to benefit from this unfortunate viral outbreak. Alpha Pro Tech (NYSEMKT:APT) stock is among that handful of beneficiaries as the company “develops, manufactures, and markets innovative disposable protective apparel and infection control products in the United States and internationally.”
It’s not a new company, as it’s been around since 1989. But few people covered Alpha Pro Tech until the demand for protective face masks became an issue with the spread of Covid-19.
Suddenly protective-gear stocks are hot, and this one in particular has the potential for strong returns as the outbreak is proving difficult to contain.
Responding to the Demand
I hate to say that Alpha Pro Tech investors have capitalized on this tragic viral outbreak, but the price action tells a story that’s unmistakable. By late February, it was evident that the coronavirus wasn’t just going to go away. Officials keep confirming new cases in the U.S. This resulted in Alpha Pro Tech shares, which had previously traded near $5, to rocket up to $37.
Obviously, people were seeking protection from the virus and face masks were in demand. Enterprising traders sought to take advantage of this through Alpha Pro Tech shares. Profit-taking set in soon afterwards, though, and the stock price quickly headed down toward $16.
That price pullback isn’t a bad thing, however. It presents an opportunity to take a position or to add shares to one’s portfolio. For one thing, investors need to realize that Alpha Pro Tech was among the first responders to the international expansion of the Covid-19 outbreak.
On Feb. 3, CEO Lloyd Hoffman announced a ramp-up in production of the company’s N-95 Particulate Respirator face masks as well as other essential protective products:
“In addition to N-95 face masks, demand for face shields and other personal protective equipment (PPE) products is increasing. The company is monitoring inventory levels across our full line of PPE products and will take appropriate steps to increase production to respond to consumer demand.”
Designed for Protection
But, of course, the strongest demand will be for face masks. The media constantly shows pictures and videos of people in China wearing face masks. So, investors will likely continue to assume that this market is the best investment in the protective-gear niche.
An important message for not only investors, but the population at large, is that not all face masks are ideal for protection against the Covid-19 virus. Alpha Pro Tech is committed to manufacturing face masks that specifically protect against airborne infections. These N-95 masks are also fully compliant with regulatory standards. That’s something you can’t necessarily say about other masks.
The company explains what makes its most popular line of face masks superior as well as why it’s called the “N-95”:
“The Alpha Pro Tech N-95 Particulate Respirator face mask’s unique flat-fold design features a Positive Facial Lock (PFL) and meets the Centers for Disease Control and Prevention’s (CDC) and National Institute for Occupational Safety and Health’s (NIOSH) recommended protection levels for many airborne contaminants. The N-95 face mask filters at least 95% of airborne particles.”
Investors and the protection-seeking population should seek quality over quantity. Therefore, they should consider Alpha Pro Tech as the company’s face masks are high quality and specifically designed for protection.
I expect the pace of orders for the N-95 face mask to continue to increase. Both businesses and citizens will want the strongest protection from the airborne coronavirus. We can already see the trajectory of the demand.
By Feb. 13, Alpha Pro Tech had already fielded over $10.4 million worth of orders for the N-95 face masks since Jan. 27. And that figure had increased to $14.1 million by Feb. 27.
The Final Word on APT Stock
Alpha Pro Tech was not only among the first responders to the spread of the coronavirus, but is meeting the strong demand for face masks. Its product sets the standard for quality, compliance and protection from this devastating disease.
David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
