The Motley Fool

Here’s why penny stock Abingdon Health (ABDX) has rocketed 140%

Coronavirus 2019-nCoV Blood Samples Medical Concept
Image source: Getty Images

If I needed proof that investing in market minnows has the potential to dramatically increase wealth, I’d take a look at the Abingdon Health (LSE: ABDX) share price. In just five days, this penny stock has climbed 140% in value.

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

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

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.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.