Mad Cow Scare Helps Companies With Animal Homing Devices

Updated from 8:25 a.m. EST

Government efforts to recall beef from a processing plant where an animal with mad cow disease was slaughtered continue to be hamstrung by the speed with which beef is distributed in the U.S. Several companies' shares were bid up Monday on grounds that their technology could resolve the problem in the future.

Eight states and Guam are believed to have received beef from the plant in Washington state where the infected cow and 20 others were turned into hamburger on Dec. 20. The states are Alaska, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.

Investigators are increasingly fearful the hamburger has already been eaten, although experts say there's very little chance any infected matter reached the public because of federally mandated precautions taken at the slaughterhouse. Over the weekend, the U.S. Department of Agriculture said it now believes the infected cow's herd came from Alberta, Canada, and that the 6-year-old animal was probably infected before being transported to the U.S.

Because tracking the infected cow back to its birth herd has been so difficult, the USDA said that an electronic tracking system to better control the spread of outbreaks is already in the works. Predictably, investors made speculative trades Monday into a variety of companies that provide services to the meatpacking industry.

Notable movers included Digital Angel (DOC Quote) and Applied Digital Solutions (ADSX Quote), both of which make electronic tracking devices that are implanted in animals. Applied Digital Solutions, which owns 74% of Digital Angel, rose a penny, or 2.3%, to 44 cents, while Digital Angel, which trades on the American Stock Exchange, rose 26 cents, or 6.6%, to $4.21.

While these names rallied, many companies that saw similar speculation last week in the wake of the outbreak were falling, demonstrating the risk of following hot money in these circumstances. Advanced ID (AIDO Quote), a small company that touted a solution for mad cow disease and rose 71% on Friday, was off 20 cents, or 17.2%, to 96 cents on Monday. Similarly, agriculture testing kit maker Strategic Diagnostics (SDIX Quote), which has jumped nearly 20% since the outbreak, was off 32 cents, or 6.4%, to $4.69 on Monday.