Personal protective equipment (PPE) has emerged as the only normal way to step outside when the world is faced with the highly infectious coronavirus. The current scenario has, in fact, spurred demand for PPEs, since these are the only products that can protect one from contracting the disease till vaccination surfaces as an option to build immunity.
Second, according to Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, it could take up to 12-18 months to formulate a vaccine. Thus PPEs remain the only solution in the near term. We have, thus, shortlisted four stocks that are gaining momentum on the front of personal protective gear. One could consider adding these to their watch-list.
PPE Market Set to Grow
Given the stringent social distancing rules and usage of personal protective gear, it isn’t surprising to expect expansion in the said market in months ahead. Especially with a reopened economy and a second wave of infections, using PPE has become quite crucial.
According to a MarketsandMarkets report, the personal protective equipment market worldwide was valued at $40.06 billion in 2016. The market is expected to hit $58.34 billion by 2022, at a compounded annual growth rate of 6.5% for 2017 to 2022.
PPE aren’t just expected to be used by individual customers but also by companies across the country as people return to their offices after the lockdown earlier this year. Workplace safety is a major concern and for now, the usage of PPE could be the only way to not contract the infectious disease.
Rising Coronavirus Cases Calls for More PPE
As of Jun 18, the total number of COVID-19 cases has climbed to hit 2,234,629 in the United States, with a death toll of 119,943. In fact, as many as nine states have reported new single-day highs or set a record for seven-day new case averages on Jun 16. The cases witnessed a spike amid fast easing of lockdown restrictions.
Arizona, Florida, Oklahoma, Oregon and Texas reported a record spike in coronavirus cases on Jun 17, while Nevada recorded its highest-ever number of single-day COVID-19 cases. North Carolina, South Carolina and Alabama have also set new highs in seven-day rolling average of the newly reported cases of the disease.
The number of infections witnessed a surge after the economy reopened across all 50 states. With businesses, shopping centers, offices, restaurants, pubs and bars opening throughout the country, an uptick in new infections is quite inevitable.
Fauci expressed his concern over new hotspots for infections that have emerged in major American states. Earlier this week, he said, “In a period of four months, it has devastated the whole world. And it isn’t over yet.”
This is why personal protective equipment and devices that can help people maintain social distancing measures for their own safety are the prerequisites at present. Although PPEs can be considered as a temporary solution when faced with a pandemic, these are effective in avoiding the infection until a vaccine is developed.
4 Stocks to Watch
We have, therefore, chosen four stocks that manufacture personal protective equipment and products such as wearables that tick off when social distancing measures are violated. All these stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com, Inc. AMZN is currently testing a new device at the fulfilment center in Kent that will alert workers when they come in close proximity of each other. Per a CNBC report, the device is a clear plastic sleeve that is equipped with an audio system and LED light. The device starts to beep if workers violate social distancing measures.
The company is also testing another technology called Distance Assistant to maintain social distancing rules. Distance Assistant uses a 50-inch monitor, a camera and a local computing device that notifies employees if they are following social distancing rules in real-time.
Amazon’s expected earnings growth rate for the next year is 91.4%. Shares of the company, which belongs to the Zacks Internet - Commerce industry, have gained 7.8% over the past month compared to the industry’s gain of 7.1% during the same period.
Honeywell International Inc. HON is a major manufacturer of personal protective equipment. Last month, the company announced that it would build a new production line of up to 4.5 million FFP2 and FFP3 disposable face masks per month at its Newhouse site in Scotland.
Honeywell International’s expected earnings growth rate for the next year is 10.5%. Shares of the company, which belongs to the Zacks Diversified Operations industry, have gained 12.4% over the past month compared to the industry’s gain of 11.6% during the same period.
Cardinal Health, Inc. CAH offers a wide range of personal protective equipment. The company is a manufacturer of disposable surgical gloves, exam gloves and cleanroom gloves along with isolation and PPE gowns that are quite helpful in minimizing risk from infectious diseases.
Cardinal Health’s expected earnings growth rate for the next year is 0.9%. Shares of the company, which belongs to the Zacks Medical - Dental Supplies industry, have gained 4.1% over the past month compared to the industry’s gain of 1.8% during the same period.
MSA Safety Incorporated MSA is a major manufacturer of air-purifying respirators. The company recently partnered with Allegheny Health Network to procure P100 industrial grade respirators to disinfect them and get them ready for repeated use.
MSA Safety’s expected earnings growth rate for the next year is 11.4%. Shares of the company, which belongs to the Zacks Security and Safety Services industry, have gained 11.1% over the past year compared to the industry’s loss of 2.2% during the same period.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
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Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Honeywell International Inc. (HON) : Free Stock Analysis Report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report MSA Safety Incorporporated (MSA) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research