Respiratory therapy product provider Allied Healthcare Products (NASDAQ:AHPI) hasn’t been favored by Wall Street over the past year. Indeed, it’s fair to say that AHPI stock has been beaten down – and perhaps unfairly so.
Is the medical products niche a dead industry? I don’t believe so. If you’re like me, then you’re skeptical of the extreme optimism that seems to already be built into the stock market as the world attempts to recover from the novel coronavirus pandemic.
Perhaps you feel that the Covid-19 pandemic will continue to cause problems for a very long time. If so, then taking a long position in AHPI stock might be a reasonable thing to do.
For all we know, Allied Healthcare Products shares could stage a massive turnaround in the near future. With that possibility in mind, let’s take a glance at the stock’s recent price action.
A Closer Look at AHPI Stock
Late March of 2021 was harsh for medical device stocks in general. The share prices of Alpha Pro Tech (NYSEAMERICAN:APT), Co-Diagnostics (NASDAQ:CODX) and Allied Healthcare Products all declined in tandem.
This leads me to believe that there wasn’t anything wrong with Allied Healthcare Products in particular.
Rather, it’s probably just Wall Street rotating out of the medical products sector in general, due to Covid-19 vaccine optimism.
The 52-week high for AHPI stock occurred a year ago, when the share price hit $20.95 on April 1, 2020.
A long, steady decline ensued after that, with the stock landing at $4.46 on March 26, 2021.
So, if you’re in the market for an out-of-favor, low-priced stock that’s trading at a significant discount, Allied Healthcare Products shares should be on your radar.
Tailor-Made for Viral Pandemics
Some companies quickly shifted their product lineups and business models when the Covid-19 pandemic spread in early 2020.
I certainly won’t blame the companies that changed their product lineups during that time. After all, businesses have to adapt to drastic changes in the markets.
Yet, like Alpha Pro Tech and Co-Diagnostics, Allied Healthcare Products was already established in the medical products segment prior to the onset of Covid-19.
And of those three companies, Allied Healthcare Products is probably the least well-known among traders and investors. So, AHPI stock could be a major under-the-radar opportunity.
If you need to be convinced that Allied Healthcare Products is tailor-made for viral pandemics, check out the company’s “mass casualty ventilation line.”
These products were “designed from inception to meet the unique ventilation demands that can occur during a mass casualty event or pandemic.” Moreover, they’re “capable of providing reliable ventilation even in unpredictable environments and conditions.”
Covid-19 Pandemic Not Over Yet
The “mass casualty ventilation line” from Allied Healthcare Products should provide strong revenues if there’s another pandemic that’s similar to Covid-19.
Yet, a whole other pandemic might not even be necessary for Allied Healthcare Products to generate strong revenues.
The current Covid-19 pandemic, with its variant strains threatening the global population, could create a strong demand for the “mass casualty ventilation line.”
Not to be too pessimistic here, but health officials from Germany recently warned that the nation’s third coronavirus infection wave could be the worst one yet.
I’m not trying to cause investors to panic. Instead, I just want to emphasize that the stock market’s extreme optimism might be overstated.
And with that, there could be a compelling bull thesis for Allied Healthcare Products. The demand for the company’s respiratory care products could be very strong, very soon.
The Bottom Line
The Covid-19 pandemic isn’t just going to end tomorrow. There will probably be a need for medical products serving Covid-19 patients for a while longer.
At the same time, AHPI stock has been severely beaten down. Hence, there could be an unrecognized opportunity to capture the future gains in an interesting medical products business.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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.