April 11, 2017 7:53am

 

What’s the trick to secondary investing, picking through the prospectus’ pages…?

Measure the CEO compensation history and the BOD’s personal holdings as every anomaly will dictate its investable ranking.  Bye and bye, also read the press release about how much the CEOs and their BOD are BUYING in their latest offering? NEVER going to happen – another rip-off!

 

Remember dilution is NOT the only solution … or is it?

 

Pre-open indications:  six (6) – 5 SELLS, 1 BUYS

 

Critical information ahead of “our” universe’s open! I provide intelligence and analysis for short and near-term investment.

Readership is a team sport, are you on it?

 

 

Expectation is the word for 2017 – meeting the unknowns with the soon to be exposed concerns will be the subject of investing decisions throughout this year.

 

 

Dow futures are DOWN -0.02% and NASDAQ futures are DOWN -0.05%

 

U.S. stock index futures pointed to a lower and mixed open on Tuesday as Secretary of State Rex Tillerson arrives in Moscow amid tensions over Syria.

European markets were slightly higher during morning trade despite increased geopolitical risks in the Middle East and Korean Peninsula adding to existing uncertainty over the upcoming French election.

Asian equities finished mixed, as investors paid particular attention to Toshiba's twice-delayed earnings results and as geopolitical tensions continued to weigh.

 

Data docket: the NFIB small business optimism index slipped to 104.7 in March from 105.3 in February. The JOLTS (job openings and labor turnover) data are also due at 10 am ET.

 

 

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

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

·         Monday closed POSITIVE with 18 decliners, 23 advancers and 2 flats;

·         Friday closed POSITIVE with 19 decliners, 21 advancers and 3 flats;

·         Thursday closed POSITIVE with 16 decliners, 25 advancers and 2 flats;

·         Wednesday closed NEGATIVE with 31 decliners, 8 advancers and 4 flats;

·         Last Tuesday closed NEGATIVE with 30 decliners, 12 advancers and 1 flat;

 

 

Remembering Monday’s closing bell newsletter, “the sector leaps and bounds while some of the usual suspects get shuffled. The oversold get valued … while the weak get even more fragile.”

  • Reiterating, “What if more investors desert the sector leaving it to traders to exact their damaged and fluctuation? Just as another financing drop – the sector feels the pain of depreciating share pricing.  Is DILUTION the ONLY solution; the question WILL be how much of the offering management will BUY with their OVERSIZED compensation???”

What did I see on Monday,  the board got shuffled – some new peaks, a few dips and some outright weakness!

  • Short term momentum is playing through but, traders still want to sink the final putt for the scorecard sell.

What didn’t I feel, sustainability; what sensation did I realize – a target being placed on the back of more than a few equities.

 

I have another question for CEOs – what if their bankers cranked an offering and no one bought - yet they will … at rock bottom pricing.

Many of these offerings are going to be out of favor relegated to the bottom-fishing funds that will buy the stock, clip the warrant, create a short and sell the share!

WELCOME to the REAL world on offering investing …

 

 

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  Monday down -0.39% and was indicating  an aftermarket negative of -0.37% and did NOT indicate in Tuesday’s pre-market;

·         The SPDR S&P Biotech ETF (XBI) closed Monday down -0.01% and was indicating an aftermarket negative indication of -0.06% and did NOT indicateTuesday pre-market;

·         The Health Care Select Sector SPDR ETF (XLV) closed down -0.19% Monday and did NOT indicate in Tuesday’s pre-open;

·         The iShares Russell 2000 (IWM) closed up +0.22% on Monday and was DOWN -0.07% in the aftermarket and was DOWN -0.27% Tuesday’s pre-open

                                                                                   

 

Companies in my headlights:

AxoGen (AXGN) closed down -$0.10 to $10.75 following Friday’s $10.85 (+$0.30). Look at the chart, AXGN has peaked before at $10.85 on 2/17/17, 2/15/17 and 1/31/17 – dropping another -$0.10. I still have a question of the debt versus cash position – Maintaining SELL;

Biostage (BSTG) closed down -$0.01 to $0.31. Where has the stock been, in a pricing “toilet” of its own making? Maybe, its new president can articulate what he has contributed to its decline? Also, where is the peer reviewed publication co-sponsored with Mayo Clinic to validate the pre-clinical status and authenticate an IND filing. TOO many questions left unanswered: How big is the esophageal implant? Was the insert low or high on the pig? Were the cells stable? Did they die and or migrate? Were there any aberrant cells seen? Did the implanted esophagus have functional peristalsis? Were there nerves into the new esophagus organ and did they develop? What was the measured physiological peristalsis strength? Was it measured?  Was there vascularity? Remember, intended consequences,  FALSE narratives and missing news won’t do the trick – Maintaining SELL;

Cytori (CYTX) closed down -$0.10 to $10.75 following Friday’s -$0.07 to $1.37.  The FDA has approved an Investigational Device Exemption (IDE) for a pilot clinical trial to evaluate Cytori Cell Therapy™ in patients with thermal burn injury. Then they announced an offering ruining ANY upside; for them dilution is the only solution. Is this all we get for a CEO who was paid $752.5 K last year; oh, in 2015 he made $845.8 K  and 2017’s base is $510 K – says it all for me – AVOID with extreme prejudice. The pre-market indication is a negative -$0.47 or -27.33% - BUY to SELL;

Juno Therapeutics (JUNO) closed up +$1.09 to $24.89. Getting rich and a new peak that could get cut down to size. The aftermarket indication was a negative -$0.35 or -1.41% - SELL;

Mesoblast (MESO) closed up +$0.64 to $10.19 following Friday’s $9.55 (-$0.25). MESO announced the P3 trial of MPC-150-IM in patients with moderate to advanced chronic heart failure was successful in the pre-specified interim futility analysis of the efficacy endpoint in the trial's first 270 patients. A good up session but, will traders put a target on its price – BUY to SELL:

Verastem (VSTM) closed down -$0.04 to $1.79 following Friday’s $1.83 ($0.06). Back to the basics, VSTM has $2.19 in cash per share and no debt thus trading below its cash value – 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.