Market Overview

PreMarket Prep Stock Of The Day: ADMA Biologics

PreMarket Prep Stock Of The Day: ADMA Biologics

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

Sometimes when you boot up your computer to observe the markets in the morning, what you initially see on the screen may not a true representation of what actually occurred in an issue in the premarket session.

A great example of this is the price action in shares of ADMA Biologics Inc. (NASDAQ: ADMA), the PreMarket Prep Stock of the Day.

What ADMA Does: ADMA Biologics is a U.S.-based biopharmaceutical company. It is engaged in the manufacture, marketing and development of specialty plasma-derived biologics.

The operating segments of the company are the ADMA BioManufacturing segment; the Plasma Collection Centers segment; and corporate segment.

The Plasma Collection Centers segment consists of three FDA-licensed source plasma collection facilities located in Georgia. The company's ADMA BioManufacturing division includes immune globulin manufacturing and development operations in Florida.

ADMA's Long-Term Performance: The issue has been an underperformer since its IPO in October 2013. The company debuted at $7 and managed to double when it peaked at $14 in December 2014.

Since that time, it has traded as low as $2.19 in November 2017 and exceeded that low when it bottomed in March at $1.46.

Before the Sunday announcement on FDA emergency use authorization of COVID-19 convalescent plasma, the issue was not far from its recent low, as it closed on Friday at $2.52.

The ADMA Catalyst: The company, along with others operations involved in convalescent plasma, are trading higher after the FDA issued emergency use authorization for convalescent plasma as a potential COVID–19 treatment.

Although the news was leaked over the weekend, President Donald Trump’s announcement on Sunday evening was icing on the cake for the stocks. 

ADMA's Premarket Action: Investors were able to participate in the price action in the issue until 4 a.m. Monday, when premarket trading commenced.

Despite plasma being discussed in the past as possible vaccine for COVID-19, aggressive traders along high-frequency algorithms seized on the issue at the open Monday. 

Within 2 minutes, the issue more than doubled, sprinting to $6 before sharply reversing course.

ADMA's Price Action During PreMarket Prep: When the issue was being discussed on the show Monday, it was trading in the $3.50 area.

Co-host Dennis Dick made clear his feelings on the issue and others getting a pop off the news.

"If I was in plasma stocks right now, I would sell them," he said. "This is a gift and I would ring the register right now."

ADMA's Price Action During Monday's Session: After a higher open, ADMA rallied another 2 cents to $3.71 and reversed course.

As of 10:30 AM EST, the ensuing decline found support above the top of Friday’s range ($2.74), only reaching $2.98 before turning north.

ADMA returned to the lower $3 handle in an attempt to distance itself from the low for the session.

The stock was trading more than 16% higher to $2.92 at the time of publication Monday. 

The full discussion on the issue from today’s show can be found here:


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