Investors are chasing every company that’s developing a promising coronavirus vaccine. I prefer instead to look for companies that supply what I call coronavirus infrastructure, asserts Eddy Elfenbein, editor of Growth Stock Advisor.
These companies will be winners no matter which companies develop a successful vaccine. Many of the leading vaccine candidates need very cold temperatures to remain viable. And because regular glass often cracks in extreme cold temperatures, special glass vials will need to be manufactured that will hold the vaccine.
At the moment, there is a massive shortage of the glass vials used to bottle vaccines. Everyone from Bill Gates to vaccine manufacturer CEOs warned about this many months ago.
That's why the U.S. government turned to the 169-year old glass maker Corning (GLW). The firm signed a $204 million deal to create millions more of its pharmaceutical-grade Valor glass vials for the government.
Corning's Pyrex glass was used to bottle polio vaccines in the 1950s. Over the course of a decade, Corning researchers experimented with more than 200 different glass compositions before landing on the one that became Valor.
The company claims that the resulting aluminosilicate glass is about 10 times stronger than conventional vials. Valor glass is made without boron. This common ingredient found in conventional glass can lead to contamination, which would be a disaster.
The glass is also more chemically durable on the inside to avoid delamination (glass flakes), and features an external coating that reduces friction so vials can slide past each other at high speeds with less chance of jamming together or breaking.
And most exciting of all, this Valor glass can withstand even the low temperatures required by the Moderna (MRNA) and the vaccine being developed by Pfizer (PFE) and BioNTech (BNTX). Among other things, this all translates to minimized breakage-related delivery delays.
The Biomedical Advanced Research and Development Authority (BARDA) has tasked Corning to increase capacity for this glass by ten times over the next three years. Corning says it is on track to start producing hundreds of millions of glass vials in 2021.
Of course, there is a lot more to Corning than glass vials for the pharmaceutical industry. The company also enjoys significant growth in its optical fiber business, as 5G continues to roll out. Think WiFi, online gaming, video streaming, and even Zoom videoconferences.
And there is growth in Corning’s specialty materials segment as the company expands its leadership position in smartphones with dual-sided glass (Gorilla Glass) and continues to grow in the wearables market.
Add in a yield of 2.78% and you have a nice stock that should show steady appreciation — especially now with soaring demand for its Valor pharmaceutical glass. Buy at any price up to $35 a share.
