Hazmat suit stocks spike on Ebola worries
One group of stocks saw huge gains Wednesday as the rest of the market tumbled: Makers of hazmat suits and protective masks.
As word spread of a second health care worker in Dallas infected with Ebola, three companies that manufacture gear that could protect against the disease saw double-digit spikes in their stock prices. Lakeland Industries (LAKE) closed up 10 percent, Alpha Pro Tech (APT) was up 14 percent and Versar (VSR) was up 65 percent.
These stocks have been extremely volatile recently as investors monitor Ebola news from around the world. The sector plunged Tuesday after the World Health Organization said the number of new cases was declining in some countries.
Wednesday, however, the stocks rose amid amid revelations that the second nurse in Dallas traveled by air the day before presenting symptoms of the disease. Officials are trying to locate all 132 passengers aboard her Frontier Airlines flight from Cleveland to Dallas.
A year ago, Lakeland Industries shares were in the $5 range. They closed Wednesday at $23.60. Lakeland makes hazmat suits and last month announced it's increasing its manufacturing capacity in response to the Ebola crisis. The U.S. State Department alone has put out a bid for 160,000 suits, the company said.
Shares of Alpha Pro Tech saw a similar surge in 2009 on concerns about the spread of H1N1 influenza. The stock had fallen since then to less than $2 a year ago. Wednesday, it closed at $8.37. Alpha Pro makes masks for medical and dental use. It also makes disposable protective gowns and shoe covers.
Versar offers a broad range of services, from environmental decontamination to construction management and engineering. In 2010, it bought a small U.K. company that makes protective equipment for the nuclear industry, including decontamination showers and emergency shelters. But that segment isn't a huge part of its business, leading some experts to conclude the stock has been incorrectly swept up in a broad investor rush into the sector.
Versar's stock closed Wednesday at $6.94, up from $4.25 a year ago. One analyst on Seeking Alpha speculated that the stock could fall back after investors realize the company doesn't focus specifically on protective garments.