Can coronavirus test-maker Novacyt still make you rich?
I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Enter Your Email Address 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. Simply click below to discover how you can take advantage of this. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Our 6 ‘Best Buys Now’ Shares Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! 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. “This Stock Could Be Like Buying Amazon in 1997” See all posts by Paul Summers Can coronavirus test-maker Novacyt still make you rich? Paul Summers | Wednesday, 29th April, 2020 | More on: NCYT Small-cap stocks can generate life-changing returns if you possess the skill or luck to buy them at the right time. That’s certainly been the case to date with coronavirus test-producer Novacyt (LSE: NCYT).At the beginning of 2020, shares in the market minnow were changing hands for just 14p each. At the close yesterday, the very same stock was trading at 426p, so some investors will have made a lot of money. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Will this form continue? Today’s update from the company was certainly encouraging. That said, I’d be wary of becoming excessively bullish on the shares if I were thinking of buying now.Novacyt in demand Taking into account its agreement with the UK Department of Health and Social Care and collaborations with GlaxoSmithKline, AstraZeneca, and The University of Cambridge, the clinical diagnostics specialist announced it had generated £90m worth of orders for its Covid-19 test. As a further sign of just how much demand there is, the company went on to remark it’s now supplying the test to “more than 100 countries” with new approvals having just arrived from Ecuador and Malaysia. What’s more, the firm also spoke of “evaluating potential options to further expand its presence” in the US.Of course, orders are only good if they can be fulfilled. Earlier this month, Novacyt said it would increase manufacturing capacity to roughly 8m tests per month. Today, it revealed it expects to meet this output in June. In addition to its two manufacturing sites, the company has also signed deals with six other manufacturers, allowing it to scale-up beyond this number when needed.CEO Graham Mullis was understandably bullish, commenting that the visibility on sales was “transformational” for the company. He also said this demand “could continue for some months.” Today’s news was undeniably positive. As great as all this sounds, however, I’m beginning to wonder if the ‘smart money’ has already been made.Priced in?Novacyt’s share price was up a few percent in the first few minutes of trading. That’s nothing like the gains seen in previous trading days. This suggests to me the market had already priced in much of today’s statement. This reaction highlights the problem with small-cap investing. Since a lot of these companies are still loss-making (Novacyt being an example), all momentum rests on hope and hype. That’s fine if you manage to time your entry well, but it can be testing when investors begin taking profits. Although they’re available for 436p, as I type, Novacyt’s shares were trading as high as 491p in mid-April. Had you bought at the peak, you’d now be 11% underwater. In the meantime, more established, profitable and liquid (easily traded) FTSE 100 or FTSE 250 stocks would have made you a lot of cash in the recent rally.Don’t get greedyNovacyt’s gains over the last couple of months have been nothing short of remarkable. Notwithstanding this, I’d caution anyone from buying a lot of the stock now. With the next stage of the pandemic hard to accurately predict, I think there’s still potential for people to lose their shirts if they chase gains and go ‘all-in’. If you simply must invest, I’d advise doing so with money that you can afford to lose. Put the rest of your cash in quality stocks that have rewarded investors over the long term. Image source: Getty Images