I planned a bit longer article today on some of the spending provisions in the budget that will be taken up by Congress this evening but it seems that the vote, which many assumed was almost a formality given some recent reports, may not go off without a hitch. Maybe a big hitch. When it comes to the fractured state of our political process a government shutdown has to be considered almost as likely as anything else.
We know there is $5.4b in the bill allocated to the worldwide fight against Ebola. U.S. hospital preparedness and support is $154M. Over $2.5b is slated for treatment and countermeasures. I have recently covered one company, Aethlon Medical, that I think may have every opportunity and should play a role in our preparedness efforts here with respect to Ebola and frankly all other infectious disease epidemics, whether here or abroad. AEMD announced news today of the opening of patient enrollment for their upcoming FDA approved IDE study for Hepatitis C patients at the DaVita MedCenter in Houston.
Other companies that we think the Ebola spending may have a positive effect on but where we have not done extensive research are as follow. We are not getting into discussions regarding the larger drug makers or those with potential Ebola inoculations. That science is tough for anyone to wade through and we have simply not spent the necessary time to do any justice to it. We are only looking at the fairly straightforward products which seem to have captured the attention of larger companies and health officials here and abroad.
Lakeland Industries (LAKE)-Protective-wear maker. This is a company that has come to prominence as a result of this epidemic and has captured the attention of the market in a pretty big way. They reported a wider quarterly loss yesterday and while much of their near term value may be based on the exposure (no pun intended) and orders they receive now, we think this could become a pretty solid investment mid to long term as well. We do expect that they will receive some additional significant orders other than those already announced. Today may offer a pretty good entry point if one believes they will benefit from the congressional appropriation. We note that their market cap and share structure are fairly attractive.
Alpha Pro Tech Ltd (APT)-Another Protective-wear maker. Decent share structure and reasonable market cap. Seems to trade in line with LAKE. Worth watching but we are not as well versed here.
Sanomedics International Holdings (SIMH)-Touchfree Medical Thermometers-Two things have attracted our attention here from a positive standpoint. One is the stated backlog for the month of October (presumably we get more guidance from them on orders shortly) and the other much bigger one is the distribution agreement recently announced with Henry Schein Inc. This makes the potential for Sanomedics much more than simply about capturing the wave of the current Ebola epidemic or going it alone to get the product into U.S. hospitals and Med. Centers. Schein’s 2013 worldwide sales in 2013 are reported to be in excess of $9.6 billion. SIMH has 113M shares outstanding according to their latest quarterly filing but at less than .02 this could offer a nice opportunity near and longer term. SIMH will need to focus on orderly debt reduction but there seems to be no reason that the increase in revenue (buffeted we hope by the inclusion of the Schein distribution deal) would not make that possible.
Disclaimer: As always do your own due diligence or consult with a trusted financial advisor prior to purchasing any equity.