As COVID-19 continues to spread around the world there has been a need for testing kits and CODX is one of the few companies which provide them.
As a Result they have seen astronomical gains to their market price from below $1 at the start of the year to around $10 at the time of writing this article. The major key factor which set CODX (Co-Diagnostic) in front of all its competitors was their ability to enter into the market first. They managed to develop a working COVID-19 test week in 8 days. It’s no wonder the company experienced such explosive growth given the quick turnaround time. Dwight Egan CEO at CODX spoke briefly about this not too long ago in an interview with Proactive.
But that isn’t the only thing CODX is involved with, they provide testing kits for other diseases like zika, tuberculosis and others, having a strong background in developing testing kits for other various diseases around the world positioned them well for this crisis and as a result they will had a strong advantage over competitors. They managed to develop a software which could break down the RNA sequence of the virus and through its analysis develop kits faster than anyone else in the market.
However saying all this I believe that the time to buy CODX is long past and that the company may even be overvalued as it currently sits. Companies such as Mologic have developed other coronavirus tests which cost about $1 and present a much cheaper alternative for customers. Other companies have also been hard at work developing test kits for the community but this presents a difficult challenge for the likes of CODX. It’s evident that after this crisis the stock price is likely to fall and I would urge caution if you were thinking of buying their stock.
Despite all this CODX presents a new opportunity, an opportunity that for the next pandemic, for the next disease that they will be at the forefront and will be likely to yet again be one of the first to develop test kits and be able to aid in the battle against the next threat. They have demonstrated that they are more than capable of doing so, along with companies such as Lakeland Industries after this crisis is finished it would be interesting to consider them as viable long term buys after their prices have settled to reasonable levels. These companies and the likes should be considered as defensive buys that will see explosive growth yet again when the time comes, so stick around and we’ll bring you that analysis first.