Coronavirus. It’s all everyone is talking about. From the media to investors to your uber driver. However, the bombardment of information, particularly from the media, is causing overinflating the coronavirus fear. Many investors saw nothing but red in their portfolios as the fear drove down the ASX by 9.58% last week. If we think logically, the coronavirus epidemic will dissipate if 1) we develop a vaccine cure/treatment and 2) if non-infected people maintain excellent levels of hygiene. Hence, many investors are going crazy about hand sanitiser stocks.
Hand sanitiser stock overview
The urgent need for people to be hygienic is triggering growth in hand sanitiser stocks. The pressing demand for sanitizer is not just found in China, Iran and South Korea but most parts of the world the world. For example, almost every Woolworths customer has asked me “Do you guys have any hand sanitiser left?”.
However, investing in hand sanitiser stocks is extremely speculative. Sanitizer stocks are not fundamentally strong. Because, their future share price depends on an increase in coronavirus cases and for the media to continue to overinflate the fear.
Today we are discussing five ASX sanitizer stocks: Zoono Group Ltd (ASX: ANO), Holista CollTech Ltd (ASX: HCT), Biotron ltd (ASX: BIT), Food Revolution Group Ltd (ASX:FDO) and Aeris Environmental (ASX:AEI).
Zoono Group Ltd (ASX: ZNO)
ZNO, a producer of antimicrobial surface sanitisers, is one of the hottest coronavirus stocks on the market with an impressive 140% surge over the past month. Early this month ZNO secured a 5-year deal with Beijing Youmeng Technology and Development. In turn ZNO can distribute its products to childcares centres and hotels across China. Also, the growing demand for hand sanitizer contributed to ZNO reporting sales for the current quarter (seven weeks only) of NZ$3.5 million in comparison to the FY 2019 revenues of NZ$1.78million.
Moreover, ZNO released a statment on Friday on how its “Zoono’s Z-71 Microbe Shield hand sanitiser” is more than 99.99% effective against the coronavirus. In turn, the investors rallied behind ZNO causing a 19% increase on Friday. Thus, if the coronavirus fears continue this week then ZNO is one to watch.
Holista CollTech Ltd (ASX: HCT)
HCT surged by 108% over the month as the demand around its NatShield sanitiser spiked. HCT’s sanitiser sold out in January leading to Holista shipping 60,000 new unitsto Malaysia in February. However after a few weeks all 60,000 units were sold out. Consequently, HCT shipped 90,000 Natshield sanitiser units to Australia, Malaysia and other parts of Asia. Also, HCT is partnering with the Global Infectious Control Consultants to develop a nasal Balm to prevent the air transmitted diseases.
Biotron ltd (ASX: BIT)
BIT, a biotech that specialises in research, development and commercialisation of viral disease drugs, is up 46%. Biotron possess over 30 compounds that can reduce levels of the coronavirus by 90%-100% in cell structures.
BIT is focused on testing these compounds against the new 2019-nCoV. However, the labourites were only available in early Feb. Hence, the release of clinical results could seethe price could possibly surge even higher.
Food Revolution Group Ltd (ASX: FOD)
FOD, an Australian producer of juices, fibres, infused fruits and fruit waters, is now on the hand sanitiser trend resulting in a 20% increase over the month.
FOD received a $2 million order for its Sanicare hand sanitiser, from distribution partner Careline Australia – 20th February.
With this being FOD’s first order, investor confidence grew. Just imagine what future orders could do to FOD’s stock price.
Aeris Environmental (ASX: AEI)
AEI, a manufacturer and technology developer, climbed 60% in February as the demand for its disinfectant Aeris Active grew rapidly.The Singapore National Environment Agency approved Aeris Active as a product for disinfecting the coronavirus. AEI’s share could escalate even further as analysts forecast sales to be $5 million plus.
Are hand sanitiser stocks worth the investment?
Before I start, I remind our viewers that this is not advice only general commentary from my extensive research in this area.
The above stocks stories are enticing. However, its is important to understand that trading hand sanitiser stocks is like a rollercoaster. The share price will jump and down. Decreasing your chances to pick the story at the right time while increasing the risk of a capita loss. I am not advising for or against the hand sanitiser strategy. Just simply acknowledging the risk.
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Patrick McLoughlin, Associate of YIG.