RegMed Investors’ (RMi) closing bell analysis, what’s driving the upside?

February 3, 2017 7:46pm

I know what it’s not … the question is today, now that the bleeding has slowed; how investible is the sector since today’s band aid adhered

Pre-open indication’s tally:  2 hit (BSTG and VCEL) and 6 miss (AGTC, BLUE, CLBS, HSGX, ONCE and STML) – my readers made money even if some money was left on the table

Did you miss who, what, where and when … and what of it in today’s results!

I’ve lived it, you can read it …

I answer one question; in which company should investors put, keep and commit their money … as I focus on the facts in evidence …

U.S. equities rallied on Friday, with financials rising around 2 percent, following a stronger-than-expected employment report.

The NASDAQ closed UP +30.57 or +0.54% to 5666.73 and the DOW closed UP +186.55 or +0.94% to 19,884.91.

A day in the life of the stem, cell, gene and regenerative therapy (SCGT & RT) sector – the advance/decline line scenario of our 43 covered companies:   

• The open was negative with an A/DL of 16/21 and 6 flats;
• The mid-day flipped positive with an A/DL of 27/14 and 2 flats;
• The close continued positive with an A/DL of 29/9 and 5 flats;

Henry’omics:

From the pre-open’s investor’s letter, “yesterday’s dog might be today’s hero but, for how long?”

• Reiterating, “If the SCG&RT sector runs out of buyers, it runs into trouble (just like a fire that runs out of wood). “

When development stage companies continually sell stock, share pricing falls further and further, scaring investors who know they must also sell those shares, which forces companies to sell even more stock.

The sector disguised heightened risks after six days of alternating closes and might be considered a rising balloon that will definitely pop as it rises to the sky:

• Friday closed POSITIVE with 9 decliners, 29 advancers and 5 flats;
• Thursday closed NEGATIVE with 23 decliners, 17 advancers and 3 flats;
• Wednesday closed POSITIVE with 14 decliners, 29 advancers and 0 flats;
• Tuesday closed POSITIVE with 11 decliners, 32 advancers and 1 flat;
• Monday closed NEGATIVE with 28 decliners, 9 advancers and 6 flats;
• Last Friday closed POSITIVE with 18 decliners, 23 advancers and 2 flats;

It may be hard for investors to admit it, but today’s upside will come at a cost!

• Remember, Icarus had wax and feathered wings which melted as he flew closer to the sun …

Traders are bidding up prices of stocks, waiting another day or two maybe three for an exit – I am definitely a sceptic!

The sector is pricing in such an outcome, so be prepared for disappointment.

• We are just playing through the extremes pre Q4/16 financial results being announced and cash positions being evident which also spurs the run to capital market access for those with cash needs.

Bottom Line, there are just TOO many risks which cause sector volatility …

The problem with “our” universe, which is driven by development spending, is that right now companies are levered to the hilt and too dependent on OPM “other people’s money”.

Indexes, the ebb and flow:

• The iShares Russell 2000 (IWM) indicated a positive +0.26% in the pre- open and closed UP +1.53%.
• The iShares NASDAQ Biotechnology (IBB) did NOT indicate in the pre-open and closed UP +1.13%

Pre-open indication’s tally:  2 hit (BSTG and VCEL) and 6 miss (AGTC, BLUE, CLBS, HSGX, ONCE and STML)

• Applied Genetic Technologies (AGTC) closed DOWN -$0.30 – miss;
• Biostage (BSTG) closed DOWN -$0.0747 – hit;
• bluebird bio (BLUE) closed UP +$1.95 – miss;
• Caladrius Biosciences (CLBS) closed UP +$0.05 – miss;
• Histogenics (HSGX) closed DOWN -$0.22 – miss;
• Spark Therapeutics (ONCE) closed UP +$0.11 – miss;
• Stemline (STML) closed UP +$0.95 – miss;
• Vericel (VCEL) closed DOWN -$0.00 – hit;

My pet peeve:

• High-frequency trading accounted for 52% of February's daily trading volume of about 7.34 billion shares <TABB Group>.
• During the peak levels of high-frequency trading in 2009, about 61% of 9.8 billion of average daily shares traded were executed by high-frequency traders.

Today’s 5 top dollar gainers included:

• bluebird bio (BLUE) +$1.95 after Thursday’s +$1.10 after Wednesday’s +$1.10 after Tuesday’s +$5.90 after Monday’s -$2.50 after last Friday’s +$2.65 and the previous Thursday’s +$0.65;
• Cellectis SA (CLLS) +$1.67;
• Intrexon (XON) +$1.10 after Thursday’s +$0.45 after Wednesday’s -$0.67;
• Stemline (STML) +$0.95 after Thursday’s -$4.15 after Wednesday’s -$0.45;
• Bellicum (BLCM) +$0.85 after Thursday’s -$0.28 after Wednesday’s -$0.50 after Tuesday’s +$1.52;

Today’s 5 largest dollar losers of the session were:

• Applied Genetic Technologies (AGTC) -$0.30 after Thursday’s FLAT at $7.20;
• Histogenics (HSGX) -$0.22;
• AxoGen (AXGN) -$0.10;
• VistaGen (VTGN) -$0.09;
• BioLife Solutions (BLFS) -$0.08

Flat:

• Adverum (ASVM) at $2.90;
• Cytori (CYTX) at $1.59;
• Opexa (OPXA) at $1.04;
• ReNeuron (RENE.L) at $2.575;
• Vericel (VCEL) at $2.60;

The downside trend reflects a pricing trend of:

• Friday’s decliners ranged from -0.88% <PSTI> to -11.64% <HSGX> in 9 equities;
• Thursday’s decliners ranged from -0.62% <CYTX> to -42.56% <STML> in 23 equities;
• Wednesday’s decliners ranged from -0.33% <VTGN> to -8.18% <BSTG> in 14 equities;
• Monday’s decliners ranged from -0.34% <KOOL> to -9.20% <AGTC> in 28 equities;
• Last Friday’s decliners ranged from -0.32% <VTGN> to -26.32% <ATHX> in 18 equities;

The upside shows a pricing trend of:

• Friday’s gainers ranged from +0.17% <ONCE> to +16.96% <STML> in 29 equities;
• Thursday’s gainers ranged from +0.30% <FCSC> to +10.53% <HSGX> in 17 equities;
• Wednesday’s gainers ranged from +0.02% <MESO> to +10.58% <BCLI> in 29 equities;
• Tuesday’s gainers ranged from +0.18% <QURE> to +12.81% <BLCM> in 32 equities;
• Monday’s gainers ranged from +0.00% <VTGN> to +3.29% <HSGX> in 9 equities;
• Last Friday’s gainers ranged from +0.25% <RGNX> to +12.77% <CLBS> in 23 equities;

As the week ends:

• Friday’s 29 gainers followed Thursday’s 17, Wednesday’s 29, Tuesday’s 32, Monday’s 28 and last Friday’s 23
• Friday’s 9 decliners followed Thursday’s 23, Wednesday’s 14, Tuesday’s 11, Monday’s 28 and last Friday’s 18

Review my fear gauge or the CBOE Volatility Index (VIX):

·         Friday traded near 10.81

·         Thursday traded near 11.9;

·         Wednesday traded near 11.90;

·         Tuesday traded near 12;

·         Monday traded near 12.3 – +16.5% higher;

·         Last Friday traded near 10.5;

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.