Utah-based molecular diagnostics company Co-Diagnosis (NASDAQ:CODX) offers health-oriented products with an emphasis on genetic technology. In the era of the Covid-19 pandemic, CODX stocks have become popular among traders on both the buy and sell side of the equation.
Co-Diagnosis plans to release its financial results for the fourth quarter and full year 2020 March 25 after the market closes. There will also be a conference call that day.
Today I am going to argue that CODX stock is already trading at a very reasonable valuation. This situation may not last too long, however, if Co-Diagnostics shares catapult higher after the earnings release.
Perhaps more importantly, I will argue that the stock is worth holding, regardless of the outcome of the beneficiary event. After all, if you believe the business has a future, short-term events shouldn’t deter you from taking a long-term position.
A closer look at CODX stocks
Today, it’s astonishing to consider that CODX stock ended 2019 at 89 cents. It is quite possible that traders will never buy stocks below $ 1 again.
Due to the emergence of the new coronavirus, the demand for diagnostic tests increased in March of last year. During that month, Co-Diagnosis shares have climbed to nearly $ 18.
Later, in early August, CODX stock hit a 52-week high of $ 30.99. However, perhaps because the stock rose too quickly, the stock price fell over the following months.
As of March 19, 2021, the stock was trading at $ 14.05. As the share price has fallen, there may be an opportunity here for bargain hunters.
Notably, CODX stock has a 12-month price / earnings ratio of 12.52. This is quite reasonable, and it implies that the shares of Co-Diagnostics are cheap relative to the company’s earnings per share.
Preparation for the winnings event
If stocks fall after the earnings data is released – and the data isn’t too terrible – then stocks could be an even better deal than they are now.
Therefore, one strategy could be to accumulate CODX shares before the release of future results. Then buy more stocks afterwards if the stock price goes down.
According to some sources, Wall Street analysts reduced their share price target by 13%.
Bargain seekers are expected to buy in times of pessimism, so lowering the target price isn’t necessarily a bad thing as the earnings report approaches.
Maybe Wall Street thinks the arrival of the Covid-19 vaccines will make testing less important.
I tend to disagree with this idea as new variant strains have been discussed in the media. This could lead to renewed interest and demand for readily available Covid-19 testing technology.
Test at home and elsewhere
There is a niche market which I believe is not yet fully developed but which has strong potential for future growth.
I am referring to home and business Covid-19 testing. If this market develops over the next few months, CODX shareholders could benefit from strong returns.
In reference to this, Co-Diagnostics recently announced “the development of a new point-of-care / home PCR [polymerase chain reaction] platform for diagnostic, screening and surveillance tests. “
This small cube-shaped device is designed to perform Covid-19 testing not only in people’s homes, but also in “businesses, schools … hotels, cruise ships, airports, airplanes and more. places”.
Here’s how it works, in a nutshell:
- The user adds a swab or saliva sample to the receptacle tube.
- Then he or she places the tube inside the device.
- The device is activated via a smartphone app.
- Finally, it should deliver the results directly to the user’s smartphone.
It is not hard to imagine that this type of testing platform is becoming extremely popular. This kit could be a game-changer as it could be much more practical in getting quick results on one’s Covid-19 status.
The bottom line
I favor the strategy of buying a few stocks of CODX before the next earnings data release.
And if the stock price drops after the fact, it’s not the end of the world. Don’t hesitate to buy a few more shares at a reduced price if you still believe in the business.
At the time of publication, David Moadel had (directly or indirectly) no position in any of the stocks mentioned in this article.
The post office Co-Diagnostics Stock is a total purchase prior to publication of results appeared first on Investor place.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.