February 13, 2017 7:19am

 

The sector is struggling after financing, operating expense and reporting issues

And a weak outlook

 

Today’s headlights, six (6) 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 started last week, 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: AGTC, BSTG, BTX, CLBS, OSIR and VSTM,

Indexes and ETFs: The IWM (+0.41%) and IBB (+0.15%) are UP, while the XBI and XLV are NOT indicating

 

Dow futures are UP +0.20% and NASDAQ futures are UP +0.07%

 

U.S. stock index futures pointed to a higher open on Monday as traders eyed earnings and looked ahead to comments from the U.S. FED later in the week.

European markets were higher, after another set of record closes on Wall Street and as investors eyed fresh data and digested new political developments.

Asian markets moved into positive territory, taking a cue from the U.S. last week after markets climbed to new high on improved risk appetite as investors shook off geopolitical concerns over North Korea's weekend ballistic missile test.

 

Data docket: none today

 

 

The stem, cell, gene and regenerative therapy (SCG&RT) closed POSITIVE on Friday and Thursday, NEGATIVE on Wednesday, Tuesday last Monday.

The SCG&RT sector’s record after the last 5 days (of 43 covered companies):

·         Friday closed POSITIVE with 15 decliners, 24 advancers and 4 flats;

·         Thursday closed POSITIVE with 28 decliners, 11 advancers and 4 flats;

·         Wednesday closed NEGATIVE with 29 decliners, 10 advancers and 4 flats;

·         Tuesday closed NEGATIVE with 22 decliners, 18 advancers and 3 flat;

·         Last Monday closed NEGATIVE with 22 decliners, 19 advancers and 2 flats;

 

 

Remembering Friday’s closing bell newsletter, “some sniffed the ugly as many bargains were recognized. Impetus to where it’s due, a number of the “usual suspects” are UP”

  • Reiterating, “I hear from funds i.e. mostly hedge funds as well as investors -- retail and institutional  brokers because they’re in the dugout or on the field to take a swing hoping that what I have imparted comes to fruition and … I haven’t been that wrong -  hitting above 300.”

Maybe, I am watching too much of Nature or Nova but …

  • As I reviewed last week, I find the sector synonymous with a squirrel’s ecosystem as they collect and hide acorns for retrieval in the future and fighting with others to not have them eaten or separated by external forces.

 

The realities of the SCG&RT sector are about the brawl of the oversold versus the overbought as well as a lack of news and stimuli.

  • My issue is share pricing as CEO salaries, bonuses and option awards are getting out of control as shareholder’s equity falls further and further DOWN!

The recent offerings are an indicator as well as the downdrafts pre and post the last quarter’s financial result isn’t – GOOD.

  • In other words, stocks are going to suffer irreparable harm that will take a lot longer to catch-up to even the beginning last year’s down pricings.

 

Expectation will be the word for 2017 – meeting the unknowns with soon to be known will be the subject of investing decisions through this year 2017.

 

 

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  Friday down -0.07% is UP +0.15%  in Monday’s pre-market;

·         The SPDR S&P Biotech ETF (XBI) closed Friday down -0.48% and is NOT indicating in Monday’s after-market;

·         The Health Care Select Sector SPDR ETF (XLV) closed up +0.21% Friday and is NOT indicating in Monday’s pre-market;

·         The iShares Russell 2000 (IWM) closed up +0.76% on Friday and is UP +0.41% in Monday’s pre-market

                                                                                   

 

Companies in my headlights:

TRADEABLE:

Applied Genetic Technologies (AGTC) closed UP +$0.45 again on Friday after Thursday’s $6.85 (+$0.45) after Wednesday’s $6.40 (-$0.05), Tuesday’s $6.45 (-$0.45) and last Monday’s FLAT at $6.90, AGTC ended the Q with $159 M in cash and with diluted shares at 18,393 M that leaves $8.64 per share in cash; and NO debt, a solid partnership with Biogen (BIIB) and the shares have dropped 51% in the last 12 months and should jump higher.  Even if it dips on Monday by traders cashing-in a pot of $1.35 – I Maintaining BUY;

Biostage (BSTG) closed DOWN -$0.2061 to $0.30 after an offering which was dropped -$0.10 to $0.40 overnight which was changed to include 20 M shares versus the 7.9 M shares and a 2000 share convertible.  The share price could drop as how many of the subscribed are NOT going to pay up at such a reduced price as the offering was conceived. The overarching issue is which of the hedge fund buyers will hold the share, the usual modis operandi is to sell the shares, strip the warrant and blindly hope for appreciation. There is a lot of blame to be thrown around, WHO will stand up for shareholders – NOT this Board of Directors and some executives who <I believe have NOT stood toe to toe, behind or supported> this hard working CEO. “Drain the swamp” – Maintaining SELL;

BioTime (NYSEMKT: BTX) closed DOWN -$0.13 to $2.88 after Thursday’s FLAT at $3.01. BTX proposed a registered direct offering of 6.48 M shares priced at $2.70. The capital access window is open – many will jump but, where will they land in the cold dark river, a splat on a sidewalk or months in the depreciation ward? Depreciation and discounts have taken their toll in the recent two offerings – Athersys (ATHX) and Biostage (BSTG). Maintaining SELL;

Caladrius Biosciences (CLBS) closed DOWN -$0.19 to $5.53 following Thursday’s $5.72 (+$0.94). 1/3/17 traded at $3.08, a year ago on 2/9/16 the stock traded at $4.82. I have never believed in this CEO although past and current members of the management team are solid professionals. Looking at the numbers and the chart sends me an impression that CLBS always need cash as their spending spirals; so I would think that CLBS will be considering an offering in the very near future – Maintaining SELL;

Osiris (OSIR) closed UP +$0.02 to $5.94 following Thursday’s $5.92 (+$0.25) having started the week at $5.51, January started at $4.89, December started at $5.61 and November’s $4.19. New directors, some data – clean up the internal mess or maybe they don’t want to open that jar too fast? What’s with the upside after late or no 8-Ks, 10-Qs or annual reports for a year and a half, add in an SEC investigation, multiple CEOs, questionable revenues, new lawyers and accountants and fired employees?  The company is under investigation and indictment - Maintaining SELL;

Verastem (VSTM) closed FLAT at $1.21 following Thursday’s $1.21 (+$0.01). There is $86.88 M in cash in the till with total cash per share of $2.35 as of 9/31/16 – Maintaining BUY;

 

 

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.