April 12, 2017 7:49am
Worries linger as to the sector’s reliance on financings
My worry is that recent offering discounts will affect future raises
Taking a shot, the fake news issue ...
Pre-open indications: five (5) – 3 SELLS, 2 BUYS
Critical information ahead of “our” universe’s open! I provide intelligence and analysis for short and near-term investment.
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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 -0.10% and NASDAQ futures are DOWN -0.16%
U.S. stock index futures pointed to a slightly lower open on Wednesday morning as U.S. Secretary of State Rex Tillerson meets his Russian counterpart Sergey Lavrov in Moscow. They are expected to discuss Ukraine, counterterrorism and a Russia's continued support for Syria's Bashar Assad.
European markets moved higher to hit highs not seen since 2015 despite investor concerns over a drumbeat of geopolitical news which has fueled the buying of safe-haven assets such as gold.
Asian markets closed mixed, as tensions continue to ratchet up on the Korean Peninsula following a warning from North Korea of a nuclear attack on the U.S.
Data docket: the release of import/export prices at 08:30 am ET and, later, the federal budget at 14:00 ET.
The stem, cell, gene and regenerative therapy (SCG&RT) closed NEGATIVE on Tuesday, POSITIVE on Monday, Friday and Thursday and NEGATIVE last Wednesday.
The SCG&RT sector’s record after the last 5 days (of 43 covered companies):
· Tuesday closed NEGATIVE with 28 decliners, 13 advancers and 2 flats;
· 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;
· Last Wednesday closed NEGATIVE with 31 decliners, 8 advancers and 4 flats;
Remembering Tuesday’s closing bell newsletter, “a discount drives down a Cytori (CYTX) offering -35%. I think this is a reminder of how onerous an offering can be; as stakeholder dilution tops -36.5% … Underscoring the degree of separation of investors and institutions.”
- Reiterating, “Remember dilution is NOT the only solution … or is it?”
What did I see yesterday, <Tuesday> the sector’s buying and selling was managed through low volume except in a few cases:
- BUYS – ADRO, BSTG and MESO,
- SELLS – CLLS, JUNO and CYTX
What else did I see:
- The overbought sold as inconsistent of fundamentals took its toll;
- The sector didn’t slip on bad news but, on NO news.
What I did read was: “Fake Investment News Could Be Here to Stay”
In MY case of contrarianism, only the truth will set us free … but, do investors want to hear it?
- In many cases, investors just can’t believe that some managements could lack judgement, be that stupid, lax or even that unknowledgeable to think they could cover-up issues … that’s where they go wrong.
Better to STAY away from a FALSE narrative – because sooner rather than later; most most supressed issues or secrets can’t be kept if they are known by two or more people …!!
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 Tuesday down -0.35% and is NOT indicating in Wednesday’s pre-market;
· The SPDR S&P Biotech ETF (XBI) closed Tuesday down -0.01% and is NOT indicating in Wednesday pre-market;
· The Health Care Select Sector SPDR ETF (XLV) closed down -0.19% Tuesday and is NOT indicating in Wednesday’s pre-open;
· The iShares Russell 2000 (IWM) closed up +0.80% on Tuesday and was DOWN -0.12% Wednesday’s pre-open
Companies in my headlights:
Applied Genetic Technologies (AGTC) closed down -$0.10 to $6.30. AGTC is trading well below its cash value, the is approximately $8.53 in cash per share – Maintaining BUY;
Organovo Holdings (ONVO) closed up +$0.02 to $3.04. The aftermarket indication was a negative -$0.19 or -6.25% after the company announced that its CEO Keith Murphy was leaving the company for entrepreneurial opportunities. KM was a friend and his commitment and expertise was the ONLY reason I kept recommending the company – SELL;
Biostage (BSTG) closed up +$0.01 to a wholesome $0.32 after Monday’s $0.31 (-$0.01). What’s keeping this stock trading – it is day trading bound and totally controlled by day traders? Maybe, its new president can articulate what he has contributed to its current financial predicament – there is an answer, you won’t like? Also, where is the peer reviewed publication co-sponsored with Mayo Clinic to validate the pre-clinical status and authenticate an IND filing. BSTG will need to be back in the market for an offering by June at this spending rate – Maintaining SELL;
Mesoblast (MESO) closed up another +$0.89 to $11.08 following Monday’s $10.19 (+$0.64) after 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. Another good up session but, will traders put a target on its price? –Maintaining SELL:
Verastem (VSTM) closed down -$0.05 to $1.74 following Monday’s $1.79 (-$0.04) after 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 – 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.
