ADC Therapeutics - Time For A Turn-Around?

This comes from our MicroMarvel series of articles highlighting undercovered stocks with less than a billion dollars in Market Capitalization. These articles are not intended to be buy recommendations. They highlight stocks that may have limited trading volume and may be highly volatile, so if you do decide to add them to your portfolio I highly recommend you use stop losses and limit orders.

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Today's MicroMarvel is the biopharma company ADC Therapeutics (ADCT). I found the stock by using Barchart's screening functions to find stocks with the highest technical buy signals, highest Weighted Alpha, superior current momentum, and having a Trend Seeker buy signal, then used the Flipchart feature to review the charts for consistent price appreciation. Since the Trend Seeker signaled a buy on 12/1 the stock gained 363.06%.


ADCT Price vs Daily Moving Averages (Barchart)

ADC Therapeutics SA, a commercial-stage biotechnology company, develops antibody drug conjugates (ADC) for patients suffering from hematological malignancies and solid tumors. Its flagship product ZYNLONTA that is in Phase II clinical trial for the treatment of relapsed or refractory diffuse large B-cell lymphoma (DLBCL) and follicular lymphoma; and LOTIS-7, a Phase Ib clinical trial for treatment of relapsed or refractory B-cell lineage non-hodgkin lymphoma (B-NHL). The company is also developing camidanlumab tesirine, an ADC composed of a monoclonal antibody that binds to CD25 conjugated to a PBD–dimer toxin, as well as in Phase II clinical trial in relapsed or refractory hodgkin lymphoma. In addition, it develops ADCT-602, which is in Phase I/II clinical trial for treatment of acute lymphoblastic leukemia; ADCT-601 that are in Phase Ia clinical trial for treatment of various solid tumors and hematological malignancies; and ADCT-212, a second-generation PBD-based ADC targeting prostate-specific membrane antigen (PSMA), including ADCT-701 and ADCT-901 for the treatment of solid tumors. It has a collaboration and license agreement with Genmab A/S, Bergenbio AS, Synaffix B.V., Mitsubishi Tanabe Pharma Corporation, Overland Pharmaceuticals, and MedImmune Limited. ADC Therapeutics SA was incorporated in 2011 and is headquartered in Epalinges, Switzerland. 

Barchart Technical Indicators:

  • 100% technical buy signals
  • 38.70+ Weighted Alpha
  • 28.50% gain in the last year
  • Trend Seeker buy signal
  • Above its 20, 50, and 100-day moving averages
  • 14 new highs and up92.51% in the last month
  • Relative Strength Index 70.43%
  • Technical support level at $4.82
  • Recently traded at $5.14 with a 50-day moving average of $2.79

Fundamental Factors:

  • Market Cap $359 million
  • Wall Street projected Revenue will decrease 67.50% this year and grow again by 18.20% next year
  • Earnings are estimated to decrease 20.70% this year but increase 19.70% next year and continue to compound at an annual rate of 15.80% for the next 5 years

Analysts and Investor Sentiment -- I don't buy stocks just because everyone else is buying, but I do realize that if major firms and investors are dumping a stock it's hard to make money swimming against the tide:

  • Wall Street issued 2 strong buy, 2 buy and 1 hold recommendation on the stock
  • Their price targets are between $6 and $14 with a consensus of $9.25 for a gain of 80%
  • CFRAs Market Scope rates the stock a sell
  • 1,880 investors monitor the stock on Seeking Alpha

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Disclosure: This article highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile ...

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