Below is an excerpt from a complimentary research note by our Healthcare Team of Tom Tobin, William McMahon, and Justin Venneri. We are pleased to announce our new Sector Pro Product Health Care Pro. Click HERE to learn more.
We're looking to put more exposure on the short side, and as vaccinations accelerate we think there will be implications for COVID-19 testing. ~140 million doses have been distributed and ~40 million Americans are fully vaccinated (~110 million total jabs).
We have been tracking the target dates closely for months now, and think we're on the doorstep of the inflection point/reopening.
We've highlighted $EXAS and others that have benefitted [massively] from COVID-19 testing, as well as labs like $NEO that simply helped out when needed and didn't make it a focus.
We've updated our claims data and are focusing time on Fulgent ($FLGT) this morning. The company benefitted from the tailwind - PCR testing - and its stock took off like a rocket ($17 -> $189 counts as a "moonshot," right?).
Estimate revisions corroborated that, but now we see the potential for volume to recede, and when we talk about COVID-comps, testing is the poster child.
We've been debating what the baseline of testing will be for weeks: Will companies require employees to be tested regularly? Will people want regular tests? Will the vaccine "passport" be good enough once everyone has one?.
The Google Trends and claims data look ominous here, and it's interesting that COVID-19 cases are crashing but testing nationally has held up.
There appears to be meaningful downside risk for $FLGT, a MicroQuad 3 stock at risk of slipping into the abyss (#MicroQuad4).