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American Bio Medica Stock Consolidates After The Big Rally: A Sign of Another Round of Rally?

One of the stocks that have seen significant bullish action in recent days is that of American Bio Medica Corporation (OTCMKTS:ABMC). Considering the interest of bulls in the stock at this point in time, it could be worth most investors’ time to have a closer look at what the company is up to. 

Major Triggers

The company is involved in the manufacturing and marketing of cost-effective immunoassay testing kits. While it is true that most of its testing kits are used for point of collection tests for drug abuse, American Bio Medica also distributes a testing kit meant for detecting the novel coronavirus. 

On top of that, it should be noted that the company has also managed to develop a global distribution network and has targeted a wide range of clients, starting from workplaces and government agencies to hospitals and educational institutions. The stock has made a strong move over the course of the past months, and the rally started back in March. 

When the rally started, the stock was only trading at $.055 a share, but as invested interest grew, trading volumes grew as well, and recently, the American Bio Medica stock managed to breach the $1 threshold. It was a remarkable rally and one that is likely to have been noticed by many market participants. 

The reason behind the massive rally in the stock is, however, not hard to recognize. Back on May 29, the United States Food and Drug Administration authorized the company’s coronavirus rapid test with an Emergency Use Authorization. The authorization allowed the COVID 19 rapid test to be used by authorized laboratories, and it goes without saying that it was a massive boost to the company. Considering the huge demand for such testing kits at this point in time, it made American Bio Medica one of the biggest players in the space. 

The Chief Executive Officer of the company Melissa Waterhouse stated in an e-mail that American Bio Medica shipped in excess of 1 million testing kits already. Investors need to keep in mind that the well-known hedge fund investors and owner of the baseball team Tampa Bay Rays, Stuart Sternberg are significant investors in the company. That could also prove to be a compelling argument for many investors. 

The company announced its financial results for the fourth fiscal quarter and the full year back in June. Net sales in the fourth quarter came in at $880,000, which was largely flat from the prior year’s net sales of $884,000. On the other hand, the net sales for the full year declined year on year by 5.6% to $3,655,000. However, operating losses for the full year was $593,000 and was lower than the $762,000 worth of operating losses in 2018.

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