Investing

Lakeland Industries Inc. (LAKE): Safe-Haven Corona Virus Hedge

The Golden Investor continues to follow the outbreak of the novel corona virus thoroughly. Until recently the outbreak seemed centered in South-East Asia and the local spread was limited. Now it seems that the virus has found a way to nestle itself across the globe. Lakeland Industries (LAKE) is one of the biggest suppliers of protective gear in the United States and is making over-hours to catch up with global demand.

Several countries have announced an export ban on medical face masks in the last few weeks. In this way they protect themselves for a potential spread between their own borders. To ensure an adequate domestic supply countries like Thailand, Taiwan, Kazakhstan, Iran and Jordan have banned the export of medical face masks. India has done the same thing, but removed some masks and gloves off the banned export list this week. However seeing the magnitude of the current acceleration of new cases across the globe this story seems far from over. Iran has gone from no cases to several deaths and a potential countrywide spread. Along with local spread in South-Korea, Italy and Japan it seems that demand for face masks will only increase in the coming months. Interesting note: today it was announced that an Israeli citizen who recently traveled to Iran got the virus, this suggest that at this moment human to human transmission has reached a point where the virus always is at least three steps ahead. Even the CDC raised their level of awareness and are afraid for local spread in the US soon.

“We’re not seeing community spread here in the United States, yet, but it’s very possible, even likely, that it may eventually happen”

CDC Director Immunization And Respiratory Diseases

Lakeland Industries is a perfect hedge for investors who want to play it safe the coming months. Lakeland Industries (LAKE) stock is actually relatively cheap at current prices, if an outbreak will occur in the USA this stock will soar while all others tank. This reverse effect is as big of risk if nothing occurs, as it is a great safe haven when hell breaks loose in Wall-Street. It seems that last week investor turned their scope to normal stocks and just wanted to gain on the latest all-time high rallies. This overshadowed the huge potential threat the corona outbreak still poses for the global economy. This week Apple announced it will miss its revenue forecast for the current quarter. This ended the optimistic view of investors after months of gains. The Golden Investor thinks this is only the beginning and investors need to be cautious for much more loses on regular stocks and need to start focusing on safe haven assets. Today gold went to 7-year highs hitting $1650 dollars, this is $150 dollars above the gold price in December, all gold stocks soared. This is exactly the reason The Golden Investor holds gold, to be safe against downturns like this. And with a decade of bad central bank policies this downturn could initiate a huge implosion on markets across the globe. A combination of gold and corona safe-haven assets like Lakeland Industries stock is the perfect hedge for investors to stay safe the coming months, and will potentially be very lucrative if this outbreak worsens.

Disclaimer: The writer of this article does not own Lakeland Industries Inc. (LAKE) stock, this article should not be interpreted as investment advice or anything like that.

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