October 13, 2017 7:52am

There are two factors pushing sentiment lower – the lack of shareholder sensitivity and any comparison to abject failures such as Biostage (BSTG)

 

What’s the gauge of pricing expectation – monetization of information!

 

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Pre-open indications: 3 SELLs and 3 BUYs


 

Trades in sector equities are precursors of news, not the other way around!

 

Higher open expected

Dow futures are UP +0.10% (23 points) and NASDAQ futures are UP +0.06% (3.75 points)

 

U.S. stock index futures pointed to a slightly higher open Friday, as investors turned their attention to a number of Fed speeches and corporate earnings reports.

European markets climbed to their highest level in almost four months, underpinned by a robust performance among material stocks.

Asian markets finished the session mostly higher as investors digested the release of China trade data. U.S. inflation and retail sales data are also due just ahead of the trading day stateside.

 

Issues that will affect the trading day: following the latest minutes publication of the Federal Open Market Committee's September meeting, a whole slew of officials from the U.S. central bank are set to deliver remarks today.

Data docket: at 8:30 a.m. ET the consumer price index (CPI) data and retail sales are set to be released. Later on in the day, businesses inventories and consumer sentiment are set to be published at 10 a.m. ET.

 

The cell therapy sector closed NEGATIVE on Thursday and Wednesday, POSITIVE on Tuesday, NEGATIVE on Monday and last Friday.

The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):

·         Thursday closed NEGATIVE with 23 decliners, 16 advancers and 4 flats;

·         Wednesday closed NEGATIVE with 26 decliners, 14 advancers and 3 flats;

·         Tuesday closed POSITIVE with 19 decliners, 23 advancers and 1 flat;

·         Monday closed NEGATIVE with 26 decliners, 13 advancers and 4 flats;

·         Last Friday closed NEGATIVE with 28 decliners, 12 advancers and 3 flats’

 

Henry ’omics:

From Thursday night’s closing bell post, “another downside day as the sector repeats and trades in another narrow band.”

Reiterating, “Basically, fundamentals haven’t moved while volume is still low and momentum continues to the downside!  The RegMed and cell therapy sector will be weak as it begins the season of financial results  (notice I didn’t say earnings) and I don’t see any huge spikes up between now and the end of the month or even the year because cash positions are depreciating as development and operating expenses are increasing.”

Thank god, it is Friday - buy, watch out it is the 13th ..

 

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) is indicating a NEGATIVE -0.06% in the aftermarket and NOT Friday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a NEGATIVE -0.1% in the aftermarket and NOT indicating in Friday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is indicating a NEGATIVE -0.04% and NOT indicating in Friday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.19% in Friday’s pre-open

 

 

Companies in my headlights:

Adverum (ADVM) closed up +$0.35 to $3.95 with 1.749 M shares traded <3 month average =210.8 K shares>. October started at $3.90 and saw a high of $3.90 and a low of $3.55. Huge volume sends a message – a ticket to ride or dive. The aftermarket indication is a positive +$0.10 or +2.53% - BUY;

Biostage (BSTG) closed up +$0.0047 to $0.12.  Are day traders ready for the filed 8-K after the close as BSTG conducted a reduction in headcount of 17 of its employees, which represented 71% of its work force. The reduction and other cost cutting measures are to explore strategic alternatives.  Pecos, its proposed investor has demanded that BSTG pay a $500 K termination fee pursuant to the terms of “their” agreement. The biggest issue is WHY the CEO and CFO are maintaining their HIGH salaries and bennies being the root and cause of BSTG’s demise – their tactical execution. As I said last night in my opinion, where is the SEC when shareholders need them? Who is left, a CEO, a CFO and 2 accountants and a systems guy – tell me about the science and regulatory initiative as even LM (a class act), the VP Regulatory quit 2 weeks ago with NO 8-K filed. Do you really think – this gang that didn’t and couldn’t shoot straight will be able to return – ANYTHING to shareholders – Maintaining SELL;

bluebird bio (BLUE) closed up +$4.75 to $130.20 with 860.5 K shares traded after being down Wednesday  -$6.20 or -4.71% to $125.45 with 929.9 K shares traded. Up, down and round and round; overtime it gets “hit”, BLUE bounces back – nothing to get overly excited about. The aftermarket indication is a positive +$0.95 or +0.73% - Maintaining BUY;

BioTime (NYSEMKT: BTX) closed down -$0.04 to $2.73 and proposed an offering (by Raymond James) causing the stock to be declining in the aftermarket and pre-market -$0.11 or -4.03% - SELL, pre-pricing.

Capricor (CAPR) closed up +$0.02 to $2.64 with 821 K shares traded after Wednesday’s +$0.16 or 6.50% to $2.62 with 1.2 M shares traded.  CAPR closed down -$0.21 on Tuesday, -$0.19 on Monday after Friday’s $2.86. 10/3, CAPR was priced at $3.28 <3 month average = 2.9 M shares>. I still think the HYPE is overplayed but, the numbers speak for themselves. Staying too long is harmful to your portfolio, harvest the new(est) upside – BUY after 10/4’s news to Maintaining SELL;

Spark Therapeutics (ONCE) closed flat at $86.20 as the FDA Advisory committee unanimously recommends approval of Investigational LUXTURNA™ (voretigene neparvovec) for patients with Biallelic RPE65-mediated Inherited Retinal Disease; after Wednesday’s -$0.65 to $86.20 with 536.9 K shares traded after Tuesday’s +$1.07 or +1.25% to $86.74 with 553.9 K shares traded after being down on Monday -$1.77 or –2.02% to $85.67 with 703.9 K shares traded <3 month average = 513.6 K shares>. The pre-market indication is a positive +$6.25 or +7.25% - Maintaining BUY;

 

 

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.