The biotech world is in a frenzy. Testing kit and vaccine companies are experiencing extreme investor backing. Despite occasional pump and dumps, the explosive share price growth for biotechs is continuing. However, a vaccine is not the answer because time is not on our side. Also, if you look at Ebola, Zika, and Sars2, a viable vaccine never came to fruition. Instead, testing kits led the fight against previous viruses and seek to do it again for COVID-19.
Why is CODX up 135% in a month?
Co-Diagnostics (NASDAQ: CODX) is in the industry captain in regards to COVID-19 testing kits. Investors rallied behind CODX in April for one reason. On the 16th of April, the OralDNA labs approved CODX’s saliva testing kits (Logix smart). OralDNA is within the FDA’s Emergency Use Authorisation (EUA) program. Thus, validation from OralDNA also meant endorsement from the FDA. In turn, Investors rallied behind CODX, causing a 44% on the 16th.
April’s momentum continued into May. However, the bullish trend was and still is, on steroids after CODX released two Price Sensitive Events (PSE’s) on the 4th of May. First, the Logix Smart Saliva testing kit was given the green light for sale in Mexico. Secondly, CODX could now begin selling its Sarange testing kit in India. Overall the two announcements screamed potential sales growth. Hence, the unprecedented number of buy orders for CODX over May.
Co-Diagnostics, founded in 2013, is a molecular diagnostics company that producers and sells reagents used for tests. Also, CODX aims to sell innovative diagnostic tools for both cancer screening and detecting infectious diseases. However, underwhelming financials is preventing CODX from carrying out its mission to its fullest potential.
While CODX was in the fight against the Zika virus, it seems their effort towards COVID-19 is the most noteworthy. CODX went from a biotech that no investor would consider to a stock that is currently capturing the eyes and wallets of every investor. Could a viable testing kit mark the turnaround in CODX’s history?
Is CODX worth the investment?
Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
CODX is an excellent stock for the short-term. (opinion not advice) The world’s growing appetite for COVID-19 testing kits is fueling CODX’s monstrous growth. Especially, as testing kits are essential for reopening economies. Thus, the reopening of economies will cause CODX to ramp up production of its Logix Smart testing kits. Ultimately, increasing revenue growth in the short-term.
From a technical standpoint, the moving average is growing in a pleasing direction. Also, each new breakout over the past few months is forming an upwards staircase. Ultimately, showing strong bullish movement for CODX.growth. (opinion not advice)
Investors must understand that once COVID-19 fizzles out CODX could fade aswell. COVID-19 brought CODX into the spotlight. However, as the fear dissipates CODX’s shares could plummet. Thus investors should be careful about investing in CODX for the long-term. Because the investment is not based on any fundamental analysis but rather riding the testing kit wave.
The biotech world is blowing up right now. You do not want to miss out on these promising COVID-19 stocks:
- Novavax (NASSDAQ:NVAX) up 125% in a month.
- Moderna Inc (NASDAQ: MRNA) up 88% in a month.
- Quidel Corp (NASDAQ: QDEL) up 80% in a month.
- Mesoblast (ASX:MSB, NASDAQ:MESO) up 60% in a month.
- Pluristem (NASDAQ: PSTI) up in a month 10% in a month.
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The information above should not be taken as 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, Senior Manager of Youth Investment Group.