Let’s take a look at what this under-the-radar firm does and, most importantly, question whether such a performance can be sustained. 

What’s this hot stock all about?

Genedrive is a molecular diagnostics business. In its own words, the company’s platform supports “the diagnosis of infectious diseases and for use in patient stratification (genotyping), pathogen detection and other indications”. These include Hepatitis C, military biological targets and, perhaps most importantly, Covid-19. 

Genedrive has been listed since 2007 and shareholders have enjoyed/endured a rollercoaster ride since. However, anyone buying at the height of panic in March 2020 will have done extremely well. Just before Boris Johnson announced the first UK lockdown, the Genedrive share price languished at just under 9p. On Friday, the very same stock closed at almost 62p. 

Why is the Genedrive share price flying? 

On 29 November, Genedrive revealed that its COV19-ID test had been supplied to “a range of potential commercial partners” for review and evaluation. This news was compounded by last week’s announcement that the company had now received the CE mark as intended. In other words, COV19-ID conforms with European health, safety, and environmental protection standards.

I won’t go into the science too much here, save to say that Genedrive’s test (performed via a nasal swab) can deliver positive results in 7.5 minutes. Negative results arrive within 17 minutes. As CEO David Budd commented, this will “allow immediacy and convenience in molecular testing, rather than waiting many hours or days for results from a central laboratory.”

On top of this, Genedrive’s test “offers several orders of magnitude improvement in sensitivity” compared to the usual antigen lateral flow devices.

Rapid results should mean a reduction in transmission rates and, ultimately, a quicker return to normality. That’s potentially great news for, well, everyone but particularly for any operator in the travel, leisure and hospitality space.

More to come?

It’s clear that the Covid-19 tale has several more chapters to run. That could provide a sustained boost to the Genedrive share price. This is especially if deals with partners are announced over the next few weeks and months. A market-cap of just £57m certainly suggests a lot more room for growth compared to the likes of, say, diagnostic peer Novacyt.

Even so, it’s clear only those blessed with a stoical temperament should apply. While GDR has soared in only a few weeks, it’s still way below the 52-week high of 165p. Those who picked up the stock in February or March will still be nursing heavy paper losses.

Due to a relatively small free float (the number of shares available to trade on the market) of 60%, I think this kind of volatility is set to continue. As evidence of this, the Genedrive share price dropped almost 12% on Friday. 

(Very) cautious buy

Recent news from Genedrive is undoubtedly encouraging and I wouldn’t rule out further gains going forward. As such, I’d consider buying a slice of the company today. That said, I’d be sure to only use money I could afford to lose while also remembering that there are other ways to take advantage of the market’s Covid-19 concerns.

The post The Genedrive share price is up over 230% in one month! Is there more to come? appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

What’s behind this rise. And, importantly, can it continue?

Why the ABDX share price is flying

York-based Abingdon Health describes itself as a “world-leading developer and manufacturer of high-quality rapid lateral flows tests“. The reason why its share price has been soaring in recent days is down to the launch of the BioSURE Covid-19 IgG Antibody Self Test. BioSURE — Abingdon’s partner — already produces rapid tests for HIV. 

This test itself uses a minute amount of blood from a finger and gives results in around 20 minutes. Essentially, it allows people to monitor their own antibody status in the comfort of their home either before getting jabbed, after getting jabbed or post-infection. Based on the thickness of the line on the testing strip, people can quickly understand whether they are protected against Covid-19 or not. 

Such a test is patently useful as economies around the world continue to recover from multiple lockdowns and lost activity. So, could this just be the start of a sustained rise in the ABDX share price?

Revenue could soar

There are certainly reasons to be bullish on the outlook. Production of the test is now in full flow at the company’s facilities in York and Doncaster. Importantly, Abingdon is also the exclusive worldwide manufacturer of the test.

There are other positives. I’m not an expert on pricing. However, £32.95 (the cost of the test) doesn’t seem excessive. Moreover, it’s likely that demand for Abingdon’s test will exist for some time as more governments shift to the idea we all need to manage rather than defeat Covid-19. It may become especially useful if booster vaccinations are deemed necessary.

Another thing worth knowing is that the BioSURE Covid-19 IgG Antibody Self Test is just one of a number of Covid-19-related products being manufactured by the firm. Assuming others make the grade, revenue growth at Abingdon could conceivably soar.  

Buyer beware

As wonderful as the performance of the ABDX share price has been, it goes without saying that there are one or two things I need to remember before investing here. 

The first is that small-cap stocks, especially those in this area, are prone to ‘pop and drop’ behaviour. A quick peek at the share price graph of diagnostic firm Novacyt bears this out.

Will Abingdon follow a similar trajectory? Well, no share price rises in a straight line. It’s inevitable some traders will want to bank profits at some point. Whether the stock continues to multi-bag before then is, naturally, very hard to say.

A related issue for investors is that Abingdon has a very small ‘free float’. Just 25% of its stock is traded on the market. That may help explain why the share has done so well recently. It only takes a few trades to really move the needle. Since the ABDX share price has the potential to also move violently downwards, I think there’s one thing I can comfortably predict: volatility. 

Overall, I rate the shares as a (very) cautious buy for my portfolio. Nevertheless, I’d only ever play with money I could afford to lose.

The post Here’s why penny stock Abingdon Health (ABDX) has rocketed 140% appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

When a market minnow attracts more buying interest than heavily-traded FTSE 100 shares such as Lloyds Bank, Rolls Royce and International Consolidated Holdings, it’s worth paying attention. Today, I’m looking at one such stock, Sareum Holdings (LSE: SAR).

Last week, Sareum was the second most popular buy on share-dealing platform Hargreaves Lansdown. Should I be buying its stock too?

Wait – what is Sareum?

Sareum is a Cambridge-based drug developer focused on tackling cancers and autoimmune diseases. Its most advanced programme (Chk1) is currently in Phase 2 of clinical trials. However, it’s Sareum’s other development programmes (TYK2/JAK1) that appear to have got investors in a frenzy.

Last week, the company announced that it had raised £1,470,000 (before expenses) by issuing shares at a price of 4.9p. Interestingly, this money has come from just one “high net worth individual” who had already invested in Sareum. 

This money will be used to advance the aforementioned TYK2/JAK1 programmes. Right now, the company has the goal of completing its preclinical studies for its SDC-1801 inhibitor drug in Q3 of its financial year. From here, clinical trials — including the potential application of its inhibitors to Covid -19 — will commence. 

So, time to buy the shares?

Not so fast. There can be no doubt that Sareum has been a wonderful investment in recent times. Anyone buying a month ago would now be sitting on a gain of roughly 175%. The result is even better for those who’ve been holding for the last year (1,150%). And yes, some positive data in the coming months could certainly see the shares soar even higher in 2021.

However, there’s are also reasons for thinking Sareum may have peaked.

Drug development is notoriously risky from an investing perspective. For every drug that succeeds, thousands do not. Delays are also very common. Indeed, Sareum has already stated that the completion of preclinical studies is “subject to successful progress”. Should the wait be longer than expected, some holders will inevitably jump ship. Moreover, clinical trials aren’t cheap and management has already stated that they are “subject to funding“. 

I’m also inclined to take a cue from what’s been seen in other Covid-related stocks over the past year. One example of this would be hyper-popular diagnostics firm Novacyt.

Having multi-bagged over the second half of 2020, Novacyt’s momentum has since reversed in a spectacular fashion. Priced at 1,190p a pop in January, the stock closed at just under 391p last Friday. Sure, I’m arguably comparing apples with oranges here. Even so, the on-off ‘coronavirus buzz’ could lead Sareum’s share to behave in a similar manner. 

Beware the dip

While I congratulate anyone already holding Sareum, the recent spike seen in its share price would make me nervous if I were a potential investor. It’s particularly worth highlighting that the company was also the third most popular sell by Hargreaves Lansdown clients last week. After such a strong run, some profit-taking is inevitable. However, this suggests that the Sareum’s near-term performance is firmly in the hands of traders, rather than long-term investors. 

At times like this, I remind myself that no share price rises in a straight line. So, if I were tempted to buy Sareum today, I’d only consider investing money I could afford to lose. There’s no shortage of promising small-cap stocks out there.

The post UK investors are buying Sareum Holdings. Should I? appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Hargreaves Lansdown and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

There’s a lot going for the FTSE 100 index, which I’ve talked about in another article today. But there’s something to be said for caution, too. There are still potential roadblocks ahead.

Here are two of them:

#1. Continued corona-crisis

The vaccine rollouts are a huge positive, but what about the new virus variant in town? We still don’t know if it’s going to respond appropriately to the Covid-19 vaccines. And if it doesn’t, we have another problem at hand. 

Moreover, there are at least some people who are wary of the vaccine. If the number increases to a level that keeps virus levels high, that could be an additional challenge. 

#2. Brexit delays

Despite the Brexit deal being struck, there are still thorny issues to contend with. A news piece I read today, for instance, pointed to struggles faced by parcel courier providers because of more complex processes.  

Financial services is another area that needs resolution. And this is important, because of the large financial services industry in the country. 

While I hope that neither of these situations blows out of control, I think they do serve as a good reminder that we should still maintain some caution in our investments. 

To that end, I would still consider buying ‘safe’ stocks or those that can withstand stock market crashes better than others.

Here are three that I’d consider:

#1. AstraZeneca — FTSE 100’s Covid-19 star

This FTSE 100 pharmaceuticals biggie hasn’t just been a literal life-saver this year, it was also one of the best performing stocks in the months following the stock market crash. 

Like all others, it saw a dramatic fall in March, but by July it made big gains and was trading at all-time highs. It has seen a sharp reversal in fortunes since the stock market rally started in November, however, as investors flocked to beaten down stocks. It’s trading at levels 20% below its 2020 highs now. 

I think it’s a solid stock in any case, but even more so when I keep the risks of another market meltdown in mind. 

#2. Hikma Pharmaceuticals — improving performance

This is another FTSE 100 healthcare stock I like, and not just because it’s a defensive one.

It put out a positive guidance in November last year, and its share price is currently near all-time highs. Though with a price-to-earnings ratio of 12.5 times, I reckon that it can increase more. 

#3. Ocado — fortune-favoured share to buy

Much like AZN, OCDO too has seen subdued share prices since the stock market rally began.

But also like AZN, it has a lot going for it in terms of long-term prospects. With the continued lockdown, I think this FTSE 100 stock will continue to perform in the short term as online deliveries remain in demand, not something we can say for all businesses. 

The post Shares to buy: 3 reasons why I’d still love to buy these FTSE 100 stocks appeared first on The Twelfth Magpie.

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Manika Premsingh owns shares of AstraZeneca and Ocado Group. The Motley Fool UK has recommended Hikma Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Since then, some volatility has set in. On Tuesday, AirBnB stock was down to almost $120. Yesterday, it was trading near $140.

Should I be considering the company for my ISA or steering well clear? Let’s start with some positives. 

Why I like AirBnB stock 

According to its website, AirBnB has 5.6 million active listings in 100,000 cities worldwide. This clearly gives it far greater geographical diversification than even the most established global hotel firms. 

Then there’s the variety on offer. According to its website, AirBnB “offers 90,000 cabins, 40,000 farms, 24,000 tiny homes, 5,600 boats, 3,500 castles, 2,800 yurts, 2,600 treehouses, 1,600 private islands, 300 lighthouses, and 140 igloos“. Companies that have something for everyone tend to remain popular. 

And then there’s the brand itself. In my experience, the question “Did you AirBnB it?” is quickly becoming the travel equivalent of “Did you Google it?“. And we all know what’s happened to parent company Alphabet‘s valuation. 

On a purely anecdotal basis, I’ve also found the whole process of booking a place to stay on weekend city breaks easy, convenient, and strangely quite fun in itself.

Given the above, you might wonder why I haven’t bought the stock already.

Reasons to be wary

My first reason relates to valuation. For all the excitement that its IPO caused, AirBnB is still massively loss-making and likely to remain so for some time. With a current market cap of over $80bn, this simply can’t be ignored.

Tellingly, at least some analysts have already turned bearish on the company. Equity research firm Gordon Haskett believes AirBnB stock will likely underperform after such a strong start. I’m confident it won’t be the last.

Aside from the valuation, the fact that AirBnB is just one of the host of companies coming to market recently is worrying. A flurry of IPOs suggests founders believe market conditions won’t get much better.

Another, perhaps inevitable reason why I’m hesitating to buy is due to the uncertainty caused by the pandemic.

While the emergence of effective vaccines has been glorious news, it will still take a while before we can all remove our face masks. Moreover, many people, although desperate for a holiday, may still feel initially safer in hotels with strict hygiene rules. The psychological impact of the pandemic may persist for longer than we think. 

On top of this, I can’t discount the possibility of greater regulation on holiday rentals. 

Be patient

As a Foolish investor, I take a long term approach. My philosophy is simple: buy right and hold. I leave the risky stuff to traders. Right now, I’m placing AirBnB stock in the latter category.

A wobbly share price doesn’t make it a bad investment, of course. Anyone who remembers Facebook‘s 2012 IPO will know that it plunged in value shortly afterward. These days, it’s one of the biggest companies around!

Even so, I’m prepared to be patient. The time to buy will be when expectations are reset back to vaguely sensible levels.

In my view, AirBnB needs to come back down to earth.

The post Should I buy AirBnB stock for my ISA? appeared first on The Twelfth Magpie.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Alphabet (C shares) and Facebook. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In my view, a second wave is a valid concern. Until a vaccine is launched and available to everyone, we can’t be sure that Covid-19 won’t return. A second wave is a real possibility. This could have a drastic impact on financial markets. UK shares could take a big hit.

Now’s the time to be thinking about risk management. So, how can you protect your share portfolio from a second wave?

I’d avoid these stocks

The first thing I’d do is check your exposure to UK shares that could be hit hard by a second wave. Examples include airline stocks (easyJet, IAG), cruise ship operators (Carnival), pubs (JD Wetherspoon), cinema operators (Cineworld), and gym operators (The Gym Group).

If we see a second wave, it’s likely that these kinds of stocks will underperform. You don’t want to be overexposed.

UK shares I’d buy for a second wave

Then I’d focus on building a portfolio that contains UK shares that should do well no matter what happens with Covid-19. Specifically, I’d focus on three main types of businesses.

Firstly, I’d invest in consumer goods businesses, such as Unilever and Reckitt Benckiser. These are highly reliable, dividend-paying companies that tend to hold up well when the economy is down.

Reckitt Benckiser, in particular, is a great UK share to own right now, in my opinion. It owns the largest portfolio of surface disinfectant brands including Dettol and Lysol. It’s also recently launched a new professional services division to help organisations keep their customers safe. In my view, Reckitt Benckiser is a classic hedge against a second wave.

I’d also buy healthcare stocks. Like consumer goods companies, healthcare companies are quite resilient. People still need medication during a recession. Two FTSE 100 healthcare companies I like are GlaxoSmithKline and Hikma Pharmaceuticals. The former specialises in vaccines and consumer healthcare products. The latter develops branded and non-branded medicines. Both UK shares are also reliable dividend payers.

I’d also buy shares in UK businesses that could see higher demand for their services in a second wave. Some examples include IT specialists Computacenter and Softcat and communications specialist Gamma Communications. These companies should all benefit from the work-from-home trend. In a second wave, they should outperform.

They are the three main types of UK shares I’d be buying right now. Own a fully-diversified portfolio that contains a number of different companies and your share portfolio should hold up well if we see a second wave.

The post Fund managers are worried about a second wave. These are the UK shares I’d buy now appeared first on The Twelfth Magpie.

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Edward Sheldon owns shares in Unilever, Reckitt Benckiser, GlaxoSmithKline, and Softcat. The Motley Fool UK has recommended Carnival, GlaxoSmithKline, Softcat, The Gym Group, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I suspect there could be more gains on the cards over the rest of the year.

Plus 500: market crash winner

Thanks to March’s market crash and the volatility seen since, total revenue at Plus 500 rocketed 281% to $564.2m compared to the same six-month period in 2019. Earnings before interest, tax, depreciation and amortization (EBITDA) came in at $361.8m — a stonking 452% higher. 

Unsurprisingly, the company welcomed a huge number of new customers (over 198,000) over the half-year. Client deposits jumped from just over $467m in 2019 to $1.65bn over the period and 47 million trades were placed — a dramatic increase on the 17.5 million seen last year.

For those already holding the stock, the good news didn’t stop there.

Dividend delight!

In addition to announcing a new share buyback programme, Plus 500 also confirmed an interim dividend of $0.95 per share. That’s a rise of almost 250% on 2019’s cash payout! It also said that it was considering paying a special dividend to holders at the end of the full year. Based on trading over the last couple of months, I think the latter is very likely to happen.

It said today that customer income in the second half of its financial year so far was still “more than double that of the prior year“. Moreover, Plus 500 is absolutely rolling in money. With no debt to its name, the FTSE 250 stock had almost $588m in cash at the end of June.            

The nature of its business means the firm won’t be to every investor’s taste. Nevertheless, it’s hard to be bearish on the company as things stand. 

Indeed, with the shares trading on just six times earnings before today’s results and the possibility that markets could remain skittish for some time to come, I certainly wouldn’t blame anyone for taking a stake now. 

Not quite as tasty

Also reporting today was FTSE 250 peer Domino’s Pizza (LSE: DOM). Unfortunately for its owners, the numbers weren’t quite as tasty as those offered by Plus 500 (although that’s a big ask). That said, they still looked pretty reasonable under the circumstances.

Thanks to a 5.5% rise in system sales over the 26 weeks to 28 June, statutory pre-tax profit from continuing operations came in 13.6% higher at £45.8m. This was despite the company needing to remove collections during the lockdown and “some inevitable and, in certain areas considerable, incremental costs”. 

Looking ahead, Domino’s reported that recent trading had been “encouraging“. Another positive for shareholders was the announcement that it would be reinstating its dividend. The deferred FY19 payout of 5.56p per share will now be paid out on 18 September. 

But let’s not get ahead of ourselves. In line with other businesses that rely on discretionary spending, Domino’s went on to say that it was “too early to conclude how customer behaviour will evolve“. The company’s fractious relationship with its franchisees still needs to be resolved as well.

Having initially bounced back to form in the aftermath of March’s market crash, Domino’s share price has now settled at roughly where it was at the start of the year. Unlike Plus 500, I can’t see a catalyst for the shares to continue rising at the current time.

The post FTSE 250 stock Plus 500 is soaring today. I think there could be more to come appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Domino's Pizza. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In this article, I’m going to highlight two UK companies that are helping the world deal with the Covid-19 pandemic. I think these ‘coronavirus stocks’ have significant growth potential.

This company is leading the fight against Covid-19 

One UK company that is certainly helping the world fight Covid-19 is Reckitt Benckiser (LSE: RB). It’s a leading health and hygiene company that owns a number of well-known, trusted disinfectant brands such as Dettol and Lysol.

Reckitt’s sales are literally flying right now. For the first half of the year, sales in its Hygiene division were up 16.1% on a like-for-like basis. Meanwhile, total group revenue for the period was up 11.9%.

Going forward, I expect sales growth to remain robust as I believe there will be an increased focus on hygiene globally. As the company said recently: “Covid-19 is likely to be with us for the foreseeable future and, as a society, we are embedding new hygiene practices to protect our way of life.”

What I find particularly interesting is that professional opportunities are opening up with service providers such as hotels and airlines. These companies are looking to provide consumers with the highest standards of hygiene. Recently, Reckitt has created a new professional service and signed agreements with the likes of Hilton, Avis, and Delta Airlines to help keep their customers safe and protected.

This coronavirus stock isn’t the cheapest stock around. Currently, RB shares trade on a forward-looking P/E ratio of about 24. I wouldn’t let that valuation put you off though. This is a high-quality company and the trend appears to be up. Barclays has it at a price target of 9,000p. That’s well above the current share price.

An under-the-radar coronavirus stock 

Another UK coronavirus stock that I like the look of right now is Computacenter (LSE: CCC). It’s a leading FTSE 250 technology company that advises organisations on IT strategy, implements technology solutions, and manages its customers’ IT infrastructures.

Computercenter appears to have a lot of momentum right now. Just last week, the company advised that due to the work-from-home trend, it had seen a “surge” in demand for IT equipment. The company also advised that its adjusted profit before tax in the first half of 2020 has turned out to be “substantially ahead” of the same period last year. It believes that 2020 will be a year of “material” progress, following a “record-breaking” 2019. 

I tipped this under-the-radar technology stock as a ‘buy’ during the stock market crash in March when it was trading at around 1,060p. Today, the coronavirus stock trades near 2,000p. I still see a lot of value here though. CCC’s forward-looking P/E ratio is about 21. I think that is very reasonable given the company’s track record and growth prospects in a post-Covid-19 world.

The post Two UK coronavirus stocks I’d buy in August appeared first on The Twelfth Magpie.

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Edward Sheldon owns shares in Reckitt Benckiser. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.