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Laboratory Corp of America (LH)

The American Hospital Association projects that some 98 million Americans will ultimately become infected with covid-19, resulting in 48 million hospitalizations. Of these, 480,000 may die. If these grim numbers prevail, covid-19 would be 10x to 15x worse than the deadliest flu season.

Every nation must come to grips with the reality of covid-19 infecting a large portion of their population, and the first step in battling the virus is to test to find out just who has it.

Testing is a big opportunity for investors

Laboratory Corp of America (LH) bills itself as the world’s leading health care diagnostics company. The North Carolina company had $11.6 billion in sales during 2019. They operate over 2,000 healthcare centres around the country. However, the best is yet to come.

Testing for covid-19 in the United States is about to ramp up substantially. LabCorp will play a central role. Managers have built a strong relationship with the Trump White House. Now the company is rolling out aggressive new testing targets.

A press release March 14 indicates LabCorp facilities will be capable of 10,000 tests per day by the end of next week, and 20,000 tests per day by the end of the month. This represents a massive new, unanticipated sales bonanza. It could last several quarters.

Its share price has been ravaged by the markets recently and now represents amazing value at $107. It was trading at almost $200 in February. Given the prospect of an uninterrupted new revenue stream, this seems extremely inexpensive. Buy now while you can still get it at these prices

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