February 9, 2017 7:53am
- Oh the market’s downside is frightful
- And, the volatility is not so delightful
- And since stocks have no place to go
- Let it snow, let it snow, let it snow
- Devaluing doesn't show signs of stopping
- How I hate during a downfall going selling
- As my return on investment is still good-bying
Today’s headlights … two (2) equities
I write in every line that investors need to avoid risks as if I were the first to be hurt if I was wrong!
Once we get through quarterly financial results <notice I didn’t say – “earnings” season> that start today, it will be easier for investors to have a 2017 view, but my fear is that the Q4 numbers aren't going to look much better than the Q3 numbers
Today’s headlights:
LONG: AGTC - BUY
TRADEABLES: BSTG, be ready for the pricing of the 7.9 M share and convertible offering - SELL
Indexes and ETFs: The IWM (+0.25%) is UP, the IBB (-0.86%) is DOWN while the XLBI and XLV are NOT indicating
Dow futures are UP +0.19% and NASDAQ futures are UP +0.14%
U.S. stock index futures pointed to a higher open on Thursday as traders eyed a big day of earnings, data and Federal Reserve speakers.
European markets were slightly higher as investors focused on earnings and took a cautious approach amid rising political uncertainty.
Asian shares retraced earlier losses to trade higher, as crude and gold prices also climbed.
Data docket: initial jobless claims are due at 8:30 a.m. ET, with wholesale trade set to come out at 10 a.m. ET.
The stem, cell, gene and regenerative therapy (SCG&RT) closed NEGATIVE on Wednesday, Tuesday and Monday, POSITIVE on Friday and NEGATIVE last Thursday.
The SCG&RT sector’s record after the last 5 days (of 43 covered companies):
· Wednesday closed NEGATIVE with 29 decliners, 10 advancers and 4 flats;
· Tuesday closed NEGATIVE with 22 decliners, 18 advancers and 3 flat;
· Monday closed NEGATIVE with 22 decliners, 19 advancers and 2 flats;
· Friday closed POSITIVE with 9 decliners, 29 advancers and 5 flats;
· Last Thursday closed NEGATIVE with 23 decliners, 17 advancers and 3 flats;
Remembering Wednesday’s closing bell newsletter, “mauled in the sector’s brawl - sector stocks fight for any … traction as the market for securities continues to grind lower. So, where’s the bottom now?”
Reiterating, “The technical picture of the SCG&RT sector has NOT changed the past week, month and quarter with a number of oversold signals suggesting that once quarterly financial results are disseminated there might be a time to buy other than in our mind’s eye.”
The harsh reality …
Judging share pricing, higher volatility versus the market’s low fear index and negative sentiment, investors are experiencing a significant rise in the riskiness of their portfolios, leaving them extremely vulnerable to more downdrafts.
It is a trading environment, NOT an investing situation!
- Investors have to get it through their head that we are looking at a lack of expectation and compounding volatility in the short and near-term.
I personally believe that “our’ universes volatility is 4X the markets. At the current market volatility of a subdued 11.24, the 4X is signaling that investors should see significant threats of continued short and near-term downdrafts.
- As markets go higher, DON’T assume the SCG&RT sector to be less risky as many apply the maxim of chasing momentum.
Think return on investment (ROI) as a non-word for sector investment; contemplate after multiple offerings, trial speculation and 10 years in the cycle – what your investment used to be worth.
I might say pick your own poisons but, choose wisely as not everything is toxic to your portfolio!
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 Wednesday down -0.24% is DOWN -0.86% in Thursday’s pre-market;
· The SPDR S&P Biotech ETF (XBI) closed Wednesday up +0.87% and is NOT indicating in Thursday’s after-market;
· The Health Care Select Sector SPDR ETF (XLV) closed down -0.15% Wednesday and is NOT indicating in Thursday’s pre-market;
· The iShares Russell 2000 (IWM) closed down -0.18% on Wednesday and is UP +0.25% in Thursday’s pre-market
Companies in my headlights:
LONG:
Applied Genetic Technologies (AGTC) closed DOWN again -$0.05 to $6.40 following Tuesday’s $6.45 (-$0.45), Monday’s FLAT at $6.90, Friday’s $6.90 (-$0.30), Thursday’s FLAT at $7.20, Wednesday’s $7.20 (-$0.05), Tuesday’s $7.25 (-$0.15) following last Monday’s $7.40 (-$0.75). AGTC) on Wednesday reported FY Q2/17 profit of $2.1 M and $0.11 per share. The results exceeded street expectations. The average estimate was for earnings of $0.03 per share. AGTC posted revenue of $10.9 M in the period, which also beat Street forecasts. Expectation was for $7.2 M. Also AGTC’s shares have decreased 32 % since the beginning of the year. The shares have dropped 51% in the last 12 months and should jump higher. The pre quarterly earnings jitters were the downdraft issue, seems to happen every quarter. Thus, I keep “flying” this flag - Maintaining BUY;
TRADEABLE:
Biostage (BSTG) closed DOWN another -$0.08 to $0.62 after Tuesday’s $0.709 (-$0.0145), Monday’s $0.72 (+$0.04), Friday’s $0.68 (-$0.075), Thursday’s $0.75 (+$0.0156) and last Wednesday’s $0.74 (-$0.0659). The forthcoming east coast storm precedes the filed S-1A to be executed to SELL 7.936 M shares and 2000 shares of a convertible preferred stock <2.645 M shares of common>; pre the offering’s depreciation indicates a sizeable discount to the pricing - Maintaining SELL;
Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.
Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.
Henry’s comments are for informational purposes only and are not a substitute for personalized advice. Consult your advisor about what is best for you.
