November 20, 2017 7:53am

Investors should pause and reflect on gains and losses if risks hibernate in a holiday-shortened week

 

Many ask, why I continue – as a “true’ believer in the science, someone with the institutional history has to keep the record straight …

My issue is the “posers” who inflate the hope and possibility of breakthroughs while “skimming” the G&A and cash positions, one example of a few - Biostage (BSTG)

 

Pre-open trading indications: 6 SELLs and 3 BUYs:

 

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Weak open expected

Dow futures are DOWN -0.02% (-2 points) and NASDAQ futures are UP +0.06% (+4 points

 

U.S. stock index futures pointed to a slightly lower open Monday, as investors turned their attention to the latest in earnings and data.

European equities ticked higher, although gains were capped as political instability in Germany rattled sentiment.

Asia markets traded mixed, following a decline in U.S. equities last Friday on lingering concerns about American tax reform.

 

Issues that will affect the trading day: Investors remain on edge as of late, as news surrounding tax reform continues to shake up markets stateside.

Data docket: On the political front: leading economic indicators are due out at 10 a.m. ET, while the U.S Treasury is set to auction off two separate bills.

 

 

Henry’omics:

From Friday night’s closing bell post, “rebound, the sector was bouncing.” sign of the times as sector opens down, flits with the upside at the mid-day and closed positive. Torque and momentum are rotational forces. Would you calculate the magnitude in follow-on sessions – you might need some forced induction!”

I have an opinion about them but, index exposure and short positions are an issue as they’re diluting many companies’ share pricing.  My issue is that algorithms make it more than a board game and seemingly a video game to play!!

Are we better off, at the moment renting the shares versus direct ownership?

Macro issues abound as investors are cautiously optimistic about the U.S. tax reform getting done this year.  One commentator he was advising investors to not make any investment decisions until there was more clarity on the tax reform.

Another political and international issue; Oil in focus amid rising Middle East tensions. Energy prices were in focus amid reports of heightened tension in the Middle East between Saudi Arabia and Iran, following the resignation of the Lebanese Prime Minister Saad al-Hariri and the escalation of the Yemeni conflict.

 

The cell therapy sector closed POSITIVE on Friday and Thursday, NEGATIVE on Wednesday, Tuesday and last Monday. The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):

·         Friday closed POSITIVE with 15 decliners, 26 advancers and 2 flats;

·         Thursday closed POSITIVE with 13 decliners, 28 advancers and 2 flats;

·         Wednesday closed NEGATIVE with 22 decliners, 18 advancers and 3 flats;

·         Tuesday closed NEGATIVE with 30 decliners, 11 advancers and 2 flats;

·         Last Monday closed NEGATIVE with 25 decliners, 17 advancers and 1 flat;

 

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) is indicating a NEGATIVE -0.06% in Monday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is NOT indicating in Monday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Monday’s pre-open;
  • The iShares Russell 2000 (IWM) is NOT indicating in Monday’s pre-open

 

Companies in my headlights:

Aduro Biotech (ADRO) closed down -$0.20 to $8.80 with 373.9 K shares traded after Thursday’s $9.00 with 682 shares traded, Wednesday’s $8.70, Tuesday’s $8.35 and last Monday’s $8.25 with 823.8 K shares traded <3 month average = 457.7 K shares> . There is approximately $5.06 per outstanding share in cash – Maintaining BUY;

Applied Genetic Technologies (AGTC) closed up $0.15 to $3.95 with 96.1 K shares traded after Thursday’s $3.80, Wednesday’s $3.80, Tuesday’s $3.85 $3.75 <3 month average = 157.1 K shares>. AGTC has a problem - perception, volume is weak, sentiment is negative and MANY still have questions as to the enrollment issues within their clinical trials and their CEO’s capacity to hear the share pricing groans of investors - tone deaf? – Maintaining SELL;

AxoGen (AXGN) closed up +$1.00 to $23.60 after Thursday’s  -$2.30 to $22.60, Wednesday’s +$0.10 to $24.90 with 194.5 K shares traded, Tuesday’s flat at $24.80 with 148.9 shares traded and last  Monday’s -$0.25 to $24.80 with 106.8 K shares traded. My issue is the cash position ($22 M) and bank debt positions ($25 M). An 700 K share offering has been proposed priced at $21.00 with a large holder selling 1 M shares and cash being raised hoping for the over-allotment of 255 K shares - Maintaining SELL;

bluebird bio (BLUE) closed up +$3.05 to $163.20 with 483 K shares traded <3 month average = 906.4 K shares> after Thursday’s +$160.15, Wednesday’s $156.90, Tuesday’s $158.35 and last Monday’s $154.55.  Last week saw $151.75 (Friday), $151.75, and the previous Monday’s $144.75 – a target for traders.  Hop, scotch, drop the stone and turn around- Maintaining SELL;

BioLife Solutions (BLFS) closed up +$0.23 to $5.92 with 98.5 K share traded<3 month average = 210.8 K shares>.  Thursday saw $5.69, Wednesday’s $6.16, Tuesday’s $6.09 and last Monday’s $6.21.  The previous week saw Friday’s $5.91 along with the previous Monday’s $5.18.  I still have a problem with their cash and debt position and their dependence on facilitation for others, sooner or later companies are going to seek external solutions for their cash position or are they borrowing or factoring against their “enhanced” share pricing - Maintaining SELL;

Biostage (OTCQB: BSTG) closed down -$0.005 to $0.07. It’s my opinion, they are hiding actions and answers to the reasons behind the company’s failure having filed a SEC late filing NT 10-Q; BSTG is unable to complete the necessary analysis and disclosures to timely file its Form 10-Q for the quarter ended 9/30/17. How can that be TRUE, there are two accountants and a CFO still on duty? Or, is it an issue of NOT disclosing the time lines, present conditions or their personal need to keep themselves on the payroll after spending $30 M with NO “findings” of regulatory initiatives in three (3) years. What are the real aspects of their former CMO role and history referencing circumstances of those female employees who left and other executive dissenters were terminated? Is there a cover-up of the many issues and timelines of previous financings, fiduciary mandated notifications related to the collapse of the company, where is the SEC?  My price target - $0.03 and hoping for indictments - Maintaining SELL;

Capricor (CAPR) has taken investors for a ride over the cliff. Their still exist an ominous question of a financing and unanswered responses re their platform integrating with other therapies are there – it was the pre- hype and early announcement of forth-coming results the caused its climax and downfall. When will investors finally see that this CEO is a total amateur! CAPR closed $2.20 Thursday’s, Wednesday’s $2.35, Tuesday’s $2.70 and last Monday’s 2.75 while the previous week rotated from Friday’s $2.47 from Monday’s $2.14. HC Wainwright announced 10/31/17 a $14 M at-the-market financing for CAPR. There is still a questionable status re financing and outstanding S-1 – Maintaining SELL;

Cellectis SA (CLLS) closed down -$0.27 to $23.74 with 121 K share traded <3 month average = 268.1 K shares>. November started at $29.18 as October ended at $35.01; we’ve seen a low of $23.33 and a high of $29.18. CLLS quarterly results were not bad (a net loss attributable to shareholders of $14.1 million (or $0.40 per share on both a basic and a diluted basis) and 9 month net loss attributable to shareholders of Cellectis of $26.2 million (or $0.73 per share). As of 9/30/17, CLLS had $304.1 million in total cash, cash equivalents and current financial assets compared to $271.2 million as of 6/30/17. This increase of $32.9 million reflects an increase of $38 million attributable to Calyxt IPO, the net cash provided by investing activities of $6.1 million included $7 million of proceeds from Calyxt’s sale leaseback transaction and the unrealized positive translation effect of exchange rate fluctuations on U.S. dollar cash, cash equivalents and current financial assets of $3.1 million; partially offset by the net cash flows used by operating activities of $15.5 million – Maintaining BUY;

Sangamo Therapeutics (SGMO) closed up +$0.02 to $14.62 with 1.12 M shares traded <3 month average = 1.67 M shares>. Thursday was priced at $14.60, Wednesday at $14.65, Tuesday at $12.980 and Monday at $12.90 while the previous fluctuated at $11.65 to $13.45.Oversold and are we forgetting a Pfizer (PFE) partnership, the aftermarket indication is a POSITIVE +$0.075 or +0.51% - Maintaining 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.