October 2, 2017 7:46am
… With the sector’s suspicious of valuations and ping-pong pricing; expectation asks us, who is paying for all this risk?
Investors, certainly not managements
… Are we ready for October and Q3’s financial results as a continuation of sporadic achievement and upside harvesting?
Pre-open indications: 3 BUYs and 4 SELLs
What’s the gauge of pricing expectation? It’s called premium content for a reason: I report the truth in “our” universe!
Preview RMi's morning call. You’d be reading this if you were a SUBSCRIBER!
If you had been right as many times as I have been in these many months of 2017 as a SUBSCRIBER you would know when to get in and out or get back in again!
A critical pre-market indication ahead of “our” universe’s open!
Higher open expected
Dow futures are UP +0.20% (44 point) and NASDAQ futures are UP +0.19% (11.50 points)
U.S. stock index futures pointed to a higher open on Monday morning as investors waited to hear from President Donald Trump and monitored new manufacturing data.
European stocks started the first trading day of the month on a higher footing but investors shunned Spanish stocks on growing political concerns in the region of Catalonia.
Asia stocks traded higher, but several major markets were set to be shuttered for much of the week.
Data docket: manufacturing PMI figures for the month of September out at 9:45 a.m. ET and ISM manufacturing data out at 10 a.m. ET. Both numbers will shed a light on the labor market ahead of the employment report due later this week.
Issues that affect the trading day: Trump is set to speak on deregulation efforts on Monday to an audience of regulatory experts in an attempt to showcase what his administration has done to eliminate excessive, job-killing regulations.
The cell therapy sector closed POSITIVE on Friday, Thursday and Wednesday; NEGATIVE on Tuesday and last Monday.
The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):
· Friday closed POSITIVE with 14 decliners, 23 advancers and 6 flats;
· Thursday closed POSITIVE with 14 decliners, 24 advancers and 5 flats;
· Wednesday closed POSITIVE with 13 decliners, 30 advancers and 0 flats;
· Tuesday closed NEGATIVE with 23 decliners, 17 advancers and 3 flats;
· Last Monday closed NEGATIVE with 23 decliners, 16 advancers and 4 flats;
Henry ’omics:
From Friday night’s closing bell post “…what is the case for the newest normal – take profits while you can” … Q4 kicks off today!
As I had stated on Friday, “The third quarter could be another loser across the sector although we have seen some gains over the period and retreats. Fundamentals remained moderately strong with despite lofty valuations. Those hoping the fewer good times aren’t over do have history on their side; Q4 is historically the strongest of the year. October could also determine whether sector equities have a great or middling move over the remainder of the year.”
Traders will be vigilant as they search for news that I believe will NOT be forthcoming as those “noiseless” weeks before Q3 results are upon us!
You’ve made it to the office, turned on the monitor, having just gotten your coffee and it hits you - what could be today’s trades?
Watch list:
- The iShares Nasdaq Biotechnology (IBB) closed up +0.92% on Friday and is indicating a POSITIVE +0.36% in Monday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) closed Friday up +0.80% and is indicating a POSITIVE +0.14% in Monday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) closed up +0.59% on Friday and is NOT indicating in Monday’s pre-open;
- The iShares Russell 2000 (IWM) closed up +0.24% on Friday and is indicating a POSITIVE +0.07% in Monday’s pre-open
Companies in my headlights:
Applied Genetic Technologies (AGTC) closed up +$0.20 to $3.95 after Thursday’s $3.75, Wednesday’s $3.70 and Tuesday’s $3.65. That’s +$0.30 in four days after a flat day ($3.65) on Monday. I WAS a believer but for a management that has let shareholders down so much- what can one see other than traders piling-on when up for those days; if it isn’t today, it will be the next – Maintaining SELL;
Asterias Biotherapeutics (NYSEMKT: AST) closed up +$0.05 to $3.40 with 1.1 K shares traded <3 month average = 104 K shares>. AST announced new 12-month data from the first efficacy cohort in an ongoing P1/2a SCiStar study designated to evaluate safety and efficacy of AST-OPC1. The 12-month data showed 67% (4/6) of Cohort 2 (AIS-A injuries administered 10 million AST-OPC1 cells) subjects have recovered 2 or more motor levels on at least one side through 12 months, which is more than double the rates of recovery seen in both matched historical controls and published data in a similar population. Also, the FDA granted the company’s request for AST-OPC1 to be designated a Regenerative Medicine Advanced Therapy (RMAT) under the 21st Century Cures Act. The aftermarket indication is a positive +$0.05 or +1.47% - BUY;
Capricor (CAPR) closed up +$0.83 (+37.5%) to $3.03 with 8.17 M shares traded <3 month average = 2.218 M shares>. A lot of shares traded and a big swing in the share pricing from 9/21/17’s $2.00 and 9/14’s $0.97 in regard to 9/3’s $1.02. The hype has totally been inflated in regard to 8/1’s $1.09. After all the failures, one development program’s upcoming HOPE-2 clinical trial of CAP-1002. This is CAP{R’s third shot on goal – will this one work? – Wait for the results as the weeks erode the share pricing? – Maintaining SELL;
Cellectis SA (CLLS) closed up +$0.98 or +3.57% to $28.45 with 158.1 K shares traded. In four (4) days there is $1.35 of premium for a share that flip-flopped in September starting at $32.18 with a high of $28.88 and a low of $25.51. The Q is over and a residual of upside, maybe I’m wrong but, if you hold it; safety always has a premium – Maintaining SELL;
MiMedx (MDXG) closed up +$0.02 to $11.88 with 3.7 M shares traded after Thursday’s $11.86 (-$0.06) with 2.4 M shares traded after Wednesday’s -$0.40 to $11.92 with 3.254 M shares traded after Tuesday’s -$0.03 to $12.32 with 2.37 M shares traded <3 month average = 2 M shares> and last Monday’s $12.35 with 2.2 M shares traded. Many of the legal challenges that have faced the company have seen significant wins. With $47.53 M in cash (6/30/17), $15 K in debt and $283.32 M in revenue and a profit margin of 7.48%. MDXG also issues a response to two (2) “short sellers” or misleading research informational reports- I’m voting for a good quarter - Maintaining BUY;
Pluristem (PSTI) closed flat at $1.51 and announced that a $7.9 million non-dilutive grant from the European Union’s Horizon 2020 program has been awarded to nTRACK, a collaborative project carried out by an international consortium led by LEITAT. The goal of the nTRACK project, initiated and led scientifically by Prof. Rachela Popovtzer of Bar-Ilan University in Israel, is to develop a safe, scalable, and highly sensitive nanotechnology-based imaging approach to enable non-invasive, whole body monitoring of injected stem cells in humans, thereby providing early predictions of cellular therapy treatment outcomes. The nTRACK consortium will utilize PSTI’s PLX-PAD cells to predict treatment success for muscle regeneration following a gastrocnemius muscle injury. Final approval of the grant is subject to the finalization of the consortium and Horizon 2020 grant agreements. Any news has had a positive effect, especially about funding – BUY;
Vericel (VCEL) closed up +$0.40 or +7.14% to $6.00 with 2 M shares traded <3 month average = 545.1 K shares> after Thursdays $5.60 (+$0.10) with 1.7 M shares traded and Wednesday’s +$0.60 to $5.50 with 1.77 M shares traded. September started at $4.35 with a low of $4.30 having hit $4.85 and $4.95, three (3) times each while August started at $3.13 with a low of $3.00 and a high of $4.30. As Q2 ended, July started at $3.40 with a low of $3.10 and a high of $3.50. The upside was a little too swift and traders will take some profit. VCEL is going to NEED a financing ($14.04 M as of Q2’s end) especially with $10.16 M in debt on the books; while revenue has been strong – I wonder if Q3 will “show”? There is $1.65 or a 27.5% premium in the share if 9.1’s $4.35 is computed - Maintaining SELL;
Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors. All investments are subject to risks. Investors should consider investment objectives.
Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.
