Follow the COVID-19 Vaccine for Profits
I don’t like the cold. I mean, I really don’t like the cold. The two weeks of winter that we saw here in South Florida was about 10 days more than I’m used to and prepared for.
But I still really have to count my blessings as the rest of the country is seeing freezing temperatures, snow and ice.
Now, I don’t bring this up to brag. I bring this up because, after revealing the amount of snow around the country, the newscaster mentioned that carriers such as FedEx Corp (NYSE: FDX) and United Parcel Service Inc. (NYSE: UPS) were struggling to keep up with shipments — including some with COVID-19 vaccines.
Sure, those carriers are working to make sure the vaccines get to their destinations in time.
But this was a lightbulb for me.
Of course there’s money to be made in the transportation of the vaccines!
You could go with investing in one of the two shippers that I mentioned above. If we check in with the ratings, your better bet would be UPS. The company is currently rated a “Buy”, while FedEx is currently a “Hold”.
Other key players in the logistics of transporting the vaccine are freezer box and dry ice manufacturers.
Pfizer Inc. (NYSE: PFE) has specifically said that it will utilize GPS-enabled thermal sensors that will track the location and temperature of each vaccine shipment. They have developed temperature-controlled thermal packaging and storage containers and add dry ice to maintain those low temperatures.
Once the vaccine reaches its destination, it needs to be transferred to an ultra-low temperature freezer where it can stay for six months. If that’s not possible, the dry ice can be replaced every five days for up to a month. And it can be refrigerated for only five days.
That’s the long way of saying it looks like there’s increased demand for freezer boxes and dry ice. So, let’s take a look at some publicly traded options ...
Back in December, Carrier Global Corp. (NYSE: CARR) issued a press release that their brand, A&M Cold Storage, recently made available 90 “Carrier Pods monitored by Sensitech” to assist with the storage and movement of the vaccines.
This’s just one of the solutions Carrier offers through its “Healthy, Safe, Sustainable Cold Chain Program” which is designed to preserve and protect the supply of food and medicine.
These specific pods offer temperature control down to -40 Celsius. The dry ice can bring conditions all the way down to -95 Celsius.
This is not a new task for the company. And it wasted no time in stepping up to support the need.
Shares of the company are up 25% in the last six months and shares are still labeled a “Buy” according to the Weiss Ratings system.
Trane Technologies plc (NYSE: TT) has also been a part of the logistics in vaccine transportation for a few months.
In late September, the company launched cold-storage solutions to support the COVID-19 vaccine distribution. COO Dave Regnery commented “Our new Cold Storage Solutions can maintain temperatures of -70 degrees Celsius for an extended period of time, can be leveraged to reduce degradation of a vaccination and, most importantly, can prevent vaccine deserts or lack of accessibility.”
Sounds like they’ve also got a solution for the urgent need. And the market has recognized that, with shares up 27% in the past six months.
This company isn’t one that I would jump on just yet, though. Last week, the ratings system issued a downgrade and it still sits in the “Hold” range.
Why? Because the company recently saw a decline in earnings per share, net income and operating cash flow. This is one to add to your watchlist, but I’m not jumping to make a move just yet.
So, what about dry ice manufacturers?
Two prominent players are U.K.-based Linde plc (NYSE: LIN) and Paris-based L’Air Liquide S.A. (OTC: AIQUY).
Both companies provide gas and technologies worldwide. Shares of Linde are up 1% in the last six months while shares of L’Air Liquide are currently down 1.74% for the same time period. I would take a closer look at the numbers before adding these to your portfolio.
But going strictly by the Weiss Ratings, L’Air Liquide is a solid “Buy”, while Linde is currently a “Hold”.
All six companies are going to see extra money from the business of vaccine transportation. But you should always look at what else the company does and how solid its balance sheet is before jumping on a trend-based investment.
Luckily, we have the Weiss Ratings to help us easily breakdown which investments are safe, and which ones we might want to sit out on.