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11 Stocks That Could Profit From a Predicted Nasty Cold-and-Flu Season

Brace yourself. After an unusually mild recent cold-and-flu season, healthcare experts expect that it will be much worse this winter. In this Motley Fool Live video, recorded on June 2, Motley Fool contributors Keith Speights and Brian Orelli discuss which stocks could profit if the warnings that a nasty cold-and-flu season is on the way prove to be right.

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Keith Speights: One of the positive side effects of the efforts to contain the spread of COVID-19 has been that we really experienced an unusually weak cold and flu season over this past winter. In fact, I know of someone who works in a pediatric clinic and said they were just astonished at how few flu cases with kids came in over the last several months.

They attribute it to all of the preventive measures that were in place with the COVID-19 pandemic. People wearing masks, schools doing remote learning. If they were doing on-campus classes, if any child showed up who had any symptoms they immediately sent them home. Anyway, they were attributing all of those efforts to really just nearly stamping out the cold and flu season. Not entirely, but largely. That's one of the positive side effects.

But now, Brian, experts are warning that we could be in store for an especially nasty cold and flu season coming up near the end of this year and into early 2022. We're investors. We're always looking ahead and looking at the investing angle on things. Are there any stocks that you think might particularly benefit if we have a really nasty cold and flu season coming up?

Brian Orelli: Yeah. I think there's probably a couple of different categories here. One would be obviously drug stores, something in like CVS Health (NYSE: CVS) ticker there's CVS, a Walgreens Boots Alliance (NASDAQ: WBA) ticker, there's WBA and Rite Aid (NYSE: RAD) ticker, there's RAD R-A-D.

I like CVS, but it's maybe not necessarily the best pick simply for cold and flu because it also has Aetna insurance. While it will sell more cold and flu medication, it'll also have increased expenses on its Aetna insurance side as people go to the doctor because of their flus at least. For all these categories, you want to evaluate the company on the whole, not necessarily buy it just because of the cold and flu season.

For test makers, Roche (OTC: RHHBY) and Abbott (NYSE: ABT) both have flu tests, but they are pretty large companies. I'm not sure how much you are going to benefit there.

If you don't want to go specific on any one test, Quest Diagnostics (NYSE: DGX) or LabCorp of America (NYSE: LH), they are more general. They run a whole bunch of different tests. They contract out with doctors to run the tests.

If you want to go to small specific, Quidel (NASDAQ: QDEL) might be a good option. Ticker there's Q-D-E-L. They have stand-alone machines that run in doctor's offices and then they're razor and blades model. You pay for each individual cartridge that you put into the machines to run the test.

In terms of vaccines and treatments, most of the vaccine makers are pretty large companies. Sanofi (NASDAQ: SNY), AstraZeneca (NASDAQ: AZN), are big flu vaccine companies.

Then for treatments, Roche is probably the biggest there. We did have the Tamiflu and Xofluza.

Then maybe outside the treatment area but ancillary to the treatment area, GoodRx (NASDAQ: GDRX) might be a good option if people are looking for cheaper medications, they might turn to GoodRx so that could help them.

Speights: I like that you started out mentioning some of the big pharmacy retailers, Brian, because not only do they benefit from increased sales of cold and flu products, but it also boosts their customer traffic in their stores, and customers can buy more products while they're there. They really count on some sales boost during cold and flu season.

But you also mentioned something really important: Don't just look at the prospects for a company for cold and flu season because there's a bigger picture for all of the companies that you've mentioned. They are not just dependent on cold and flu sales. That's just one factor to include in your thinking.

Brian Orelli, PhD has no position in any of the stocks mentioned. Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Quidel. The Motley Fool recommends CVS Health and GoodRx Holdings, Inc. The Motley Fool has a disclosure policy.


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