August 15, 2017 8:04am
Which one do you want to depend on or lose to?
Was it a relief rally on Monday and will it continue…
I live by the fifteen (15%) percent rule; up and out, down and in!
Pre-open indications: 2 BUYs and 4 SELLs
Q2 results, we have heard from thirty seven (37) so far and many a message was ineffective!
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Critical indication ahead of “our” universe’s open!
Higher open expected
Dow futures are UP +0.24% and NASDAQ futures are up +0.29%
U.S. stock index futures pointed to a positive open on Tuesday, as tensions around North Korea show signs of alleviating and investors turn their attention to more data.
European markets were higher as tensions between the U.S. and North Korea showed signs of subsiding, prompting investors to return to riskier assets.
Asia markets closed higher, with markets benefiting from Wall Street's strong lead and subsiding risk aversion.
Data docket: with retail sales, import and export price indexes and the Empire State manufacturing survey all due out at 8.30 a.m. ET. Later on in the day, business inventories and the NAHB/Wells Fargo housing market index will come out at 10.00 a.m. ET, followed by Treasury International Capital (TIC) data, due out at 4.00 p.m. ET.
Poltico issues related to the morning open: North Korea's leader Kim Jong Un stated that he would hold fire on making a decision surrounding a missile strike on Guam. Kim is reportedly looking for future actions by the U.S. before making a decision,
The cell therapy sector closed POSITIVE on Monday, Friday, NEGATIVE on Thursday, Wednesday and last Tuesday.
The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):
· Monday closed POSITIVE with 12 decliners, 28 advancers and 3 flats;
· Friday closed POSITIVE with 14 decliners, 28 advancers and 1 flat;
· Thursday closed NEGATIVE with 33 decliners, 8 advancers and 2 flats;
· Wednesday closed NEGATIVE with 31 decliners, 10 advancers and 2 flats;
· Last Tuesday closed NEGATIVE with 28 decliners, 14 advancers and 1 flat;
Henry ’omics:
As I had stated the evening post, “it was a sector rebound” after having stated in Monday’s pre-opening bell post, <which was deleted by a computer problem>
· The recent flip-flops of the cell therapy and regenerative medicine sector are typical of a tired market!
· Last week I pointed out that there were a number of Q2 results that made me nervous about some of the sector’s “run-ways”.
· This included the lagging action of many loss-per-share announcements as weak relative performance that will under power the sector and ... I also pointed out that the sector was just “one up day away from another down”.
· The advance/decline lines are bickering with fundamentals, technical and charts as negative seasonal bias continues to take its toll
The sector has shown signs of just being tired, with stocks trading higher for two days following three lower in the trading week.
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 up +1.03% on Monday and after hours was up +0.43% but, is NOT indicating in Tuesday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) closed Monday up +0.90% and is indicating a POSITIVE +0.18% in Tuesday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) closed up +0.66% Monday and is down in after houts -0.3% yet,is NOT indicating in Tuesday’s pre-open;
- The iShares Russell 2000 (IWM) closed up +1.49% on Monday and is indicating a POSITIVE +0.17% pre-open on Tuesday
Q2/17 reporting for … thirty seven (37) so far to date:
Regenerative Medicine Earnings Scorecard - Q2/2017 - to date … http://www.regmedinvestors.com/articles/9841
Companies in my headlights:
Asterias Biotherapeutics (NYSEMKT: AST) closed up +$0.05 to $3.30. On Monday reported a loss of $8.7 million or -$0.18 per share. AST posted revenue of $316,000 in the period, which missed forecasts having expected $1.3 million. AST has $11.9 million in cash and if the net loss from operations was -$8.5 million with multiple trial coming in line: an offering will be needed or a new tranche of debt financing. The aftermarket indication is a negative -$0.05 or -1.52% - SELL;
Biostage (BSTG) closed down -$0.09 or -17.71% to $0.42 after Friday’s $0.51(+$0.0003), Thursday’s $0.51 (-$0.049), Wednesday’s $0.56 (-$0.03) and last Tuesday’s $0.58 (-$0.0099) Now we understand why the return on assets <3/31/17> is a negative - 109.36% and return on equity is negative as well - 336.31%. The newest now, the Cellspan esophageal product is no longer going to have an IND filed in Q3 as promised for the last 2 years. No response to its filed dismissal of a terminal death suit … a telling reminder of its first failure and a potential death knell. As I stated last night, all that shareholder money down the drain and then forced to do yet another down financing ($0.315) as the architect (its CMO and president) of multiple failures is elevated to the BOD. The new lead program, pediatric atresia; this is strange to now go after pediatric esophageal atresia; there is an approved device by Cook Medical – another rope-a-dope? Way to go BSTG, reward failure … as shareholders bear the brunt of megalomania and the stock closes down -$0.09 or -17.71%. How hard is it to provide the relevant facts to the status of the company, to tell the truth, management has a fiduciary and … legal … responsibility? Maybe yet another set of lawyers is needed to represent shareholders? – Maintaining SELL;
BioLife Solutions (BLFS) closed flat at $3.80 after Friday’s $3.80 (+$0.20) post Q2 results after Thursday’s $3.59 (-$0.06), Wednesday’s $3.66 (-$0.05) and last Tuesday’s $3.70 (-$0.05). BLFS is getting too RICH, having started the week at $3.48, July at $2.62, June at $2.15 and May at $2.02. BLFS restructured its debt and will report Q2 financial results on 8/10. Be prepared for an OFFERING – Maintaining SELL;
Fate Therapeutics (FATE) closed up +$0.11 to $3.09. FATE reported a loss of $9.6 million or -$0.23 per share in Q2. The results exceeded expectations. The average estimate was for a loss of $0.24 per share. FATE posted revenue of $1 million in the period. A year ago, FATE was trading at $2.56. Cash, cash equivalents and short-term investments as of June 30, 2017 were $71 million. In July 2017, FATE amended its loan agreement with Silicon Valley Bank pursuant to which the company repaid its existing debt obligations in full and entered into a new $15 million term loan. Cash proceeds to the Company after repayment of its existing debt obligations were $7.5 million. Under the new term loan, only payments of interest are owed through January 1, 2019, after which time the company will repay principal plus interest in 30 monthly installments. Revenue was $1.0 million for the second quarter of 2017 and as well as for the comparable period in 2016. All revenue was derived from the Company’s research collaboration and license agreement with JUNO. The aftermarket indicated a positive +$0.35 or +11.33% upside. – BUY.
Kite Pharma (KITE) closed up +$2.82 to $122.86. KITE reported narrower-than-expected loss in the Q2 and beat estimates for sales. Since 1/3/17, KITE’s stock is up approximately +62.6%, KITE is getting a little too rich and there is a negative aftermarket indication of -$1.06 or -0.86% - SELL;
Sangamo therapeutics (SGMO) closed up +$1.35 to $11.60. Last Wednesday, SGMO reported a loss of $12.5 million or -$0.17 per share. The results topped expectations as the average estimate was for a loss of $0.23 per share. SGMO posted revenue of $8.3 million and expects full-year revenue in the range of $30 million to $40 million. The aftermarket indication is a positive +$0.14 or +1.25% - BUY;
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.
