January 10, 2018 7:48am
Share pricing performance ... while sentiment and opinion shape the prospects in the short term
In the short run, the market is like a voting machine - tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine - assessing the substance of a company <Benjamin Graham>
The return on capital invested is overshadowed by reliance on capital market access, dilution and depreciation weighted by G&A spending as compared to share pricing!
The real issue is preponderance of the bouncing share price
Pre-open indications: 5 SELLs and 2 BUYs
Lower open expected
Dow futures are DOWN -0.44% (-108 points) and NASDAQ futures are DOWN -0.57% (-38 points)
Dow futures fell more than 110 points and gold rose on Wednesday. On Wednesday, markets worldwide seemed to be pulling back from recent highs, as investors take note of the current market environment.
European equities were lower as investors monitored corporate earnings and fresh data.
Asian markets closed mostly lower despite a solid lead from Wall Street overnight, but Hong Kong stocks bucked the trend and closed higher for a 12th straight day.
Issues that will affect the trading day: Day 3 at the JP Morgan and the ancillary, surrounding conferences and mini meetings if SF
Data docket: mortgage applications are set to come out at 7 a.m. ET, followed by U.S. import and export price indexes at 8:30 a.m. ET, and wholesale trade figures, at 10 a.m. ET. Atlanta Fed Business Inflation Expectations are also due out at 10 a.m. ET.
Issues on the political front: Investors will be awaiting the latest remarks by key Fed members, as a number of officials are set to speak.
Henry’omics:
From Tuesday night’s closing bell post, “…sentiment and volatility are still the judge and jury while the healthcare conference rolls on. Many traders weren’t “conferencing” in SF and algorithms and ETFs were also not invited! While the clinical achievement issues of 2016 were not washed away while the sector opened up, slid at 11 a.m., stayed down at mid-day and closed to the downside.”
I also stated, “Many traders weren’t “conferencing” in SF and algorithms and ETFs were also not invited! Invitees have yet to open their wallets to vote for presentations – a lot of talk and no real buying action!”
The indicated pullback comes after all three major U.S. benchmarks scored all-time closing highs on Tuesday, even as the S&P 500 index ended only 0.1% higher and the Nasdaq climbed less than 0.1%. The Dow rose 0.4%.
Where is all the news that should be emanating from the conference?
Says it all … doesn’t it!
The cell therapy sector’s record over 5 sessions (of 40 covered companies): The RegMed and cell therapy sector closed NEGATIVE on Tuesday, Monday and last Friday, POSITIVE on Thursday and last Wednesday:
· Tuesday closed NEGATIVE with 21 decliners, 18 advancers and 2 flats;
· Monday closed NEGATIVE with 26 decliners, 13 advancers and 1 flat;
· Friday closed barely NEGATIVE with 20 decliners, 18 advancers and 2 flats;
· Thursday closed barely POSITIVE with 19 decliners, 21 advancers and 0 flats;
· Last Wednesday closed POSITIVE with 15 decliners, 23 advancers and 2 flats;
Today’s indications:
- The iShares Nasdaq Biotechnology (IBB) is indicating NEGATIVE -0.2% in Wednesday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) is NOT indicating in Wednesday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) is indicating a NEGATIVE -0.28% in Wednesday’s pre-open;
- The iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.41% in Wednesday’s pre-open
Companies in my headlights:
Applied Genetic Technologies (AGTC) closed down -$0.15 to $4.20 after Monday’s $0.05 to $4.35 after Friday’s +$0.20 to $4.30 with 112.1 K shares traded <3 month average = 110.5 K shares>after Thursday’s +$0.20 to $4.10 with 191.9 K shares traded. The three (3) sessions of the 2018 have been good as the previous Friday (12/29) closed at $3.67 having been down from Thursday’s $3.67. AGTC has clinical trial timing issues and spending woes – Maintaining SELL;
bluebird bio (BLUE) closed down -$0.60 to $109.50 (it had been up +$1.15 at the mid-day) after Monday’s -$4.90 to $170.10 with 675.1 K shares traded <3 month average = 888.9 K shares>. BLUE has issued an additional 277,109 shares of common stock at the public offering price of $185 per share, for total gross proceeds of approximately $51.3 million, pursuant to the partial exercise of the underwriters’ over-allotment option in connection with the offering of common stock. After giving effect to this exercise of the over-allotment option, the total number of shares sold by BLUE in the public offering was 3,520,353 and gross proceeds of the offering were approximately $651.3 million – Maintaining BUY:
Capricor (CAPR) closed down -$0.02 to $1.65 after Monday’s +$0.06 to $1.67 with 347.3 K shares traded <3 month average = 800.8 K shares>. Cash is getting low and CAPR NEEDS to finance. It’s up from $1.57 in five (5) sessions; mark my words, the trigger will be pulled soon – Maintaining SELL;
Cesca Therapeutics (KOOL) closed up +$0.43 to $3.78 after Monday’s +$0.14 to $3.35 with 121.1 K shares traded <3 month average = 78.8 K shares. The aftermarket indication is a positive +$0.06 or +1.63%, it never holds for long; 12/27/17 the share price was $2.80. Not a believer – Maintaining SELL;
Intrexon (XON) closed up +$0.96 to $13.68 with 2.5 M shares traded. The aftermarket indication is a positive +$0.12 or +0.88% but, what’s it based on - ActoBio Therapeutics, a wholly owned subsidiary of Intrexon Corporation (XON) did present at Biotech Showcase about its P2b and early portfolio of candidates for clinical development across a number of potential indications; 1/4/18’s share pricing was $12.89 having closed at $11.52 on 12/29/17. An Icarus candidate? – SELL;
Osiris Therapeutics (OSIR) closed up +$0.52 to $7.22 with 74,048after Monday’s +$0.31 to $6.70 with 87.5 K shares traded <3 month average = 21.6 K shares>. On 12/27/17, the price was $5.77, the question I ask is which of their former executives will go to jail and when will their past due filings be applied – other than the, it’s pure speculation – Maintaining SELL;
Verastem (VSTM) closed up +$0.02 to $2.94 after Monday’s -$0.05 to $2.92 following Friday’s -$0.08 to $2.97 with 1.62 M shares traded<3 month average = 863 K shares> after Thursday’s -$0.09 to $3.05 with 833.2 K shares traded after Wednesday’s $3.14, Tuesday’s $3.21 and the previous Friday’s (12/29) $3.07 after Thursday’s $3.20. VSTM amended its Loan and Security Agreement with Hercules Capital increasing its existing borrowing limit under the loan facility from $25 million to up to $50 million in financing. VSTM had received the first $15 million of financing under the original Loan and Security Agreement. Additional tranches of up to $35 million in aggregate will be available to VSTM to drawdown subject to certain conditions – it’s better (cheaper)than an offering, although it still costs stock and warrants – 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.
