I’m not just thinking about how my stocks portfolio could suffer in the short-to-medium term, however. I’m looking at stocks that I could buy to help offset weakness elsewhere. There are plenty of UK shares for me to buy whose services should remain in strong demand if the public health emergency persists. Here are two top stocks I’d buy if the battle against the pandemic begins to look shaky.

Abingdon Health

Penny stock Abingdon Health (LSE: ABDX) makes rapid lateral flow tests that diagnose whether or not an individual has contracted Covid-19. It therefore serves an essential role in helping prevent the spread of the virus and in keeping the world turning during the pandemic.

Abingdon launched its BioSURE Covid-19 IgG Antibody Self Test over the summer, a kit that can detect infection from a drop of blood within 20 minutes. The company has embarked on massive investment at its manufacturing sites in York and Doncaster to meet strong demand. It also makes other medical products to detect infection. And more recently it has been undertaking work that could see it mass produce antigen tests for Avacta and Vatic Health. All this bodes well for future revenues.

The marketplace for coronavirus testing kits is huge, sure. And a high-profile failure of its testing kits could prove catastrophic for future business wins. But I’m encouraged by the reliability of Abingdon’s technologies so far and think its huge investment programme could deliver mighty returns for its shareholders.

Bunzl

Support services firm Bunzl (LSE: BNZL) is the perfect pick for me in uncertain times like these, I feel. It sells a huge range of essential products and services to a variety of end markets across the globe. This allows profits to remain stable during the good times and the bad.  And so it could be the perfect pick as the Omicron variant threatens the global economic recovery.

This strength-through-diversification is the reason I added the FTSE 100 firm to my shares portfolio several years back. But this isn’t the only reason I’m considering adding to my holdings today. This is because Bunzl’s revenues have actually risen as a direct result of Covid-19. Turnover rose 9.4% year-on-year in 2020 as demand for its masks, gloves, disinfectants and other protective products soared.

Bunzl shares trade on a P/E ratio just above 19 times for 2022. I think such a premium valuation is deserved given its long-term record of growing annual profits, whatever the weather. I plan to hold my Bunzl shares for a long time. That’s even though poor execution of its acquisition-led growth strategy creates notable risks. Failures on this front could have a particularly serious impact if they forced the firm to dial back its ambitious M&A drive.

The post 2 of the best UK shares to buy as the Omicron variant spreads appeared first on The Motley Fool UK.

This company — whose stock recently fell to its cheapest price in around a month — makes coronavirus testing equipment. Therefore demand for its product will actually benefit from a long battle against Covid-19.

Abingdon launched its antibody BioSURE Covid-19 IgG Antibody Self Test in late August to help in the battle against the virus. And, earlier this month, it rolled out a score-card accessory to its AbC-19 test which helps scientists study antibody response and immunity.

A word of caution however. Abingdon operates in a massively competitive arena and is a relative tiddler compared to many other Covid-19 test makers. And, of course, sales of its product will fall hard if a breakthrough in the final fight against coronavirus happens.

A lower-risk penny stock

I still think Abingdon’s a top penny stock for me to buy, though Assura (LSE: AGR) might be more attractive due to its lower risk profile. This UK share doesn’t operate in the highly-competitive medical product arena. Nor does it have to endure the threat of failed drugs development, a constant problem for medicine manufacturers.

No, this low-cost stock builds, acquires and operates primary healthcare properties across the country. This gives it excellent defensive qualities as medical centres are essential at all points of the economic cycle. In fact, I expect demand for the properties Assura specialises in to steadily increase as Britain’s elderly population balloons.

I reckon this is a great penny stock to buy and hold for years, despite the risks created by its acquisition-driven growth strategy. Assura’s healthy appetite for asset purchases puts it peril of overpaying for an asset that ultimately underdelivers and creates large unexpected costs.

Engineer terrific returns

Van Elle Holdings (LSE: VANL) is another cheap UK share I think could deliver titanic long-term returns. As a provider in ground engineering services, it’s well-placed to ride the British construction boom of the next 10 years.

This penny stock provides a spectrum of technical services for the highways, rail, power, and utility sectors. It can therefore expect demand for its expertise to rise as infrastructure spending in Britain picks up. Van Elle also provides an array of ground services for housebuilders, meaning it should benefit a ramping up in home creation too. The government has plans to create 300,000 new homes per year by 2025.

It’s true that Van Elle could suffer if the UK economic recovery shudders to a halt. In this scenario, custom from the commercial and industrial sectors could sink. But as someone who looks to buy shares with a long-term view, I still think this penny stock has plenty to offer.

The post 3 of the best penny stocks to buy in October appeared first on The Motley Fool UK.

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

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.

The post Here’s why penny stock Abingdon Health (ABDX) has rocketed 140% appeared first on The Motley Fool UK.

Off the chain

The Renold (LSE: RNO) share price has boomed on Monday following a positive reception to latest trading numbers. At 24p per share, the penny stock was last trading 23% higher from last week’s close.

Business is booming at Renold as the economic recovery takes hold. The industrial chain and transmission products maker said that “the strong momentum experienced in the fourth quarter of the last financial year has been maintained in the new financial year.” This meant that revenues clocked in at £62.5m for the four months to 31 July, up 13.6% year-on-year. At constant exchange rates, sales were up a fraction below 20% from the corresponding 2020 period.

Renold racked up orders worth £79.7m, too, up 61.3% on an annual basis or 69.3% at stable exchange rates. Moreover, it said that its total order book stands at all-time highs of £70.5m right now.

As a consequence of this strong trading Renold said that it expects adjusted operating profit for the half- and full-year “to be higher than both market expectations and the equivalent prior year period.” However, it added that supply chain disruptions, allied with rising raw materials and transport costs, have been causing some uncertainty in its markets.

Despite today’s share price jump, Renold still offers decent value for money on paper. The AIM company trades on a forward price-to-earnings growth (PEG) ratio of 0.5 (a figure below 1 suggests that stock could be undervalued by the market). I therefore think this UK share could be a great way to play the steady rebound in the world economy. Its products are used in a wide variety of applications such as on food production lines, on underground railway trains and on a broad selection of construction equipment.

Another soaring penny stock

Abingdon Health (LSE: ABDX) is another UK penny stock that’s soaring in start-of-week trade. At 70p per share the healthcare play is trading 13% higher on the day following news concerning its coronavirus antibody tests.

Abingdon said that its BioSURE Covid-19 IgG Antibody Self Test had been launched today. This follows the signing of an manufacturing agreement with rapid diagnostic test manufacturer Biosure Limited late last month. Abingdon is the exclusive manufacturer of the tests at its sites in York and Doncaster following a pilot production run.

Of course Abingdon isn’t the only UK share involved in the manufacture of Covid-19 equipment. In fact competition in this market is intense and threatens to get worse. But as I explained recently, the public health emergency is tipped to run on for the next few years at least, perhaps even indefinitely. So I think this penny stock could still enjoy meaty profits growth in the short-to-medium term at a minimum. Like Renold, I’d happily buy this cheap UK share right now.

The post These penny stocks have rocketed today! Here’s why I’d buy them appeared first on The Motley Fool UK.