Today’s penny stock screen gave me the name of a company that I believe has some real potential.  It is a high-risk, high-reward small cap stock play that may take a few days or weeks to realize its potential.

Enough intro…  The stock is Adamis Pharmaceutical Corporation (ADMP) and it is a penny stock that is beaten down from a chart standpoint.  There are going concern issues, concerns about the ability to fund the development and clinical trials for their suite of anti-viral drugs. and not a lot of good news on the boards.

To the Chart!

The chart looks both good and bad.  The MACD is bearish. but not overly so.  Stochastics indicate an oversold position, but to me the most telling statistic is volume.  Look at that volume!  That indicates to me that other larger players are in this stock.  If volume can remain strong and the IR people can put out some meaningful PR, this stock could fly.  The Bollinger Bands have narrowed and it is trading at the lower bands.

The wild card for this stock is contained in the June 23rd PR (read it here).  The company announced that it had begun shipping its first product:  pre-filled epinephrine syringes  (PFS) (Epinephrine Injection USP 1:1000.  According to the company, they will quickly capture a significant percentage of the $200 MM Epinephrine market with a product that is superior to what is already on the market.  I always take such pronouncements with a grain of salt, but I will be interested to see PR related to this product launch.   The company realizes that this product launch has to be successful for so many reasons:  current cash flow, good PR, showing investment community they are viable, etc…

Given what I had said about the precarious financial condition of the company, the obvious question is “what about the downside?”  While I did not get hard numbers or revenue guidance out of the company when I called them, it was clear that they believe they have turned the corner with their EPI product.    Without the release of any financial info or guidance, I  recommend that you keep a tight stop on it if numbers disappoint.

Definitely a good radar penny stock.