Thursday, October 16, 2014

The Ebola Stocks

The spread of the Ebola virus is a terrible worldwide tragedy that affects governments, people, and businesses throughout the world. I had mixed feelings about publishing this article, as it refers to making money from stocks that are benefiting from this virus. I believe the psychologists refer to this as cognitive dissonance. However, if it wasn't for these companies, there may not have been cures and treatments for many diseases, if businesses didn't have the ability to raise money from selling stock and have a market that is maintained for their shares.

Several low cap companies in the disposable protection business have seen their shares more than triple in the last month. For example, Alpha Pro Tech (APT) went from less than $3 per share to $10 in the last 30 days, but hassince dropped to less than $7 as of the close on the day this was written. The stock has a fairly high price to earnings ratio of 48, and reported an 88.8% quarterly earnings increase on a 9.8% rise in revenues.

The more conservative way to invest in this market is through one of the larger capitalization companies, such as CVS Health (CVS) or Clorox (CLX). Although not a large part of the business, CVS sells gloves, masks, hand sanitizors, and other germ prevention items. The stock trades at 19 times forward earnings and 16 times trailing earnings. Quarterly earnings were up 10.9% on a 10.7% revenue boost. It pays a 1.4% yield. The company reports its next quarterly earnings on November 4.

Clorox trades at 23 times earnings and 20 times forward earnings, with a 7.1% drop in earnings for the latest reported quarter and a slight drop in revenues. The yield is a generous 3.1%. Next earnings report is on Halloween.

If you want a free list of over a dozen Ebola stocks, you can access the list at The list includes some financial ratios and the business connection. Let's hope this epidemic gets taken care of quickly.

Disclosure: Author does not own any of the above and has no plans to do so in the next 24 hours. 



AdriansCrazyLife said...

That's an interesting point of view. I would never have thought about it, but it does make a certain sad sense. You hear so much about Ebola these days even though there's only maybe 10 people in the whole US who currently have the disease. People definitely go off the deep end on things like this.

Anonymous said...

Also check out KMB - Kimberly Clark:

"Kimberly announced that Halyard Health will begin normal trading on the New York Stock Exchange on Nov. 3 under the symbol "HYH." Kimberly Clark shareholders as of the close of trading on Oct. 23 will receive one share of Halyard for every eight shares owned of Kimberly Clark."

Stockerblog said...

Yes, I agree that the news is way overblown and the extreme fear is unwarranted. However, that hasn't stopped a few stocks from reaching nosebleed prices.

Stockerblog said...

To Anonymous: Good point. I like Kimberly Clark, and I think KMB is a great company. It should be added to the list.