Alpha Pro Tech (APT) announced an increase in orders for masks amid the coronavirus outbreak, one day after revealing fourth-quarter earnings. APT shares skyrocketed. APT said Thursday that it had reserved around $14.1 million in mask orders since January 27. That is higher than the $10.4 million that APT had reported just two weeks ago on February 13.
The manufacturer of protective equipment is increasing the production of its N-95 facial mask, citing higher demand for the coronavirus outbreak, now known as Covid-19.
On Wednesday, APT posted diluted earnings of three cents per share, below the five cents of the previous year. Revenue reached $10.92 million compared to $ 10,969 million a year ago. There were no estimates available for stocks that were previously under-commercialized.
APT Stock Skyrockets
Gross margins suffered in 2019 due to a change in the product mix, the company said. But he expects an improvement in gross margin in 2020, “since the gross margin in the N-95 face mask is significantly greater than our overall gross margin.”
Shares rose 104% to 25.25 in the stock market on Thursday. APT shares shot up 96% in January and more than 341% so far this week alone amid the worsening coronavirus crisis. The relative bolt strength line shows that the APT stock is currently exceeding the S&P 500.
Trading volume had averaged less than 20,000 shares per day before mid-January but exceeded 24 million on Wednesday.
The fellow manufacturer of protective equipment for Lakeland Industries shares grew by 22.5% and has risen more than 45% in the week.
Shares of Dow Jones 3M, a diversified manufacturer that also manufactures medical products, rose 0.8% even when the overall blue-chip index fell 1,100 points. The manufacturer of cleaning products and disinfectants Clorox (CLX) added 0.4%.
Should You Buy Alpha Pro Tech (APT) Stock?
Readers are asking AlphaBetaStock.com if they should buy Alpha Pro Tech (APT) stock. The answer is maybe. Unlike most stock recommendations, there is very little to analyze because of the APT stock sudden rise and also increase is based on sentiment.
Typically experts would recommend staying away from these types of stocks because they are very risky. Investors that understand and assume the risk may want to buy APT stock for a short term trade. The winds behind Alpha Pro Tech (APT) stock could change anytime. Once the coronavirus sentiment is gone, we expect APT stock to drop fast and hard.
Another play is to find stocks that are currently oversold. My pick would be Starbucks stock (SBUX). It is getting a beat down because of the coronavirus but should bounce back afterward. Here are a couple of stocks to look at:
Anheuser-Busch InBev SA/NV (BUD)
Kearny Financial Corp. (KRNY)
Delek Logistics Partners, LP (DKL)
Stock Market News Today
American investors are focused on the spread of the Chinese coronavirus. Currently, the number of patients around the world continues to grow. Yesterday, Nigeria announced the first infected citizen in Africa. The most serious foci of the disease remain in China, South Korea, Italy, and Iran. Today, the World Health Organization has warned that coronavirus can reach all or the vast majority of countries.
According to Moody’s Analytics, the likelihood of a virus outbreak escalating into a pandemic has now doubled at 40%. Such a development may lead to a recession in the American and world economies in the first half of this year.
Despite the difficult situation, the most important indicators of the American economy are still positive. Yesterday’s GDP data confirmed its growth by 2.1%. Durable Goods Orders for January decreased but not as significant as expected, by only 0.2%, and Pending Home Sales for January grew by 5.2%, exceeding forecasts (2.2%).
Today’s unemployment data met market expectations; the rate remained unchanged at 5.0%. Unemployment Change decreased by 10K, amounting to 2.262 million. Despite the dire state of the German economy, the labor market continues to remain stable.
At a press conference today, the head of the Bundesbank, Jens Weidmann, said that economic growth in Germany could be slightly lower than it was forecasted at the end of last year.
The spread of coronavirus seriously adds uncertainty to the situation. Weidmann also said that he considers the ECB’s current policy to maintain inflation below 2% but close to it, correct.
GBP is still under pressure amid investors’ concerns about the failure of trade negotiations between the EU and the UK. Currently, the parties’ requirements for the deal are largely mutually exclusive, while the British government said it could cancel the negotiations if a compromise were not found before June.
Additional pressure on GBP has the comments of the outgoing Chairman of the Bank of England, Mark Carney. In an interview with Sky News, he said that the British economy is already experiencing the negative effect of the outbreak of coronavirus: there are disruptions in the supply chain and a decrease in tourist flows to the country.
Crude Oil Prices
Crude oil quotes continue to decline. The instrument is under pressure of investors’ concerns related to the spread of the Chinese coronavirus, which has already infected more than 40 countries. The consumption of oil and other energy may be under even higher pressure soon. In these conditions, the aggravation in relations between Syria and Turkey cannot yet provide substantial support to prices. In the evening, the publication of the Baker Hughes report on active oil platforms in the United States of America is expected. Previously, the number increased from 678 to 679 units. Continuation of this trend may put pressure on oil quotes.