January 12, 2018 7:55am
While volume remains low and relative strength lines are also low
Sentiment augmented by ETFs and algorithms doesn’t facilitate any immediate high ground
Sector companies are also preparing their Q4 and end-of-year (EOY) numbers reflecting cash and “runway” positions
Let’s see who has a pole position in jumping through the offering “window” in Q1/18?
Pre-open indications: 3 SELLs and 2 BUY
Higher open expected
Dow futures are UP +0.40% (+103 points) and NASDAQ futures are UP 0.11% (7.5 points)
European stocks moved higher as investors digested new earnings, data and a political breakthrough in Germany.
Asian markets clawed back slight gains after finishing slightly lower in the last session, with most major indexes in the region tracking the strong lead from Wall Street
U.S. stock index futures posted sharp gains ahead of Friday's open, as Wall Street carries over the positive trading seen in the previous session
Issues that will affect the trading day: Investors and analysts will be poring over the latest earnings reports to see if there are any clues as to how the recent changes to the U.S. tax code could impact each company.
Data docket: At 8:30 a.m. ET, retail sales and consumer price indexes (CPI) are both due out, followed by business inventories data, set to come out at 10 a.m. ET.
Issues on the political front: investors will be keep a close eye on bond markets, after investors fretted over the risk of China halting its Treasury bond purchases.
From Thursday night’s closing bell post, “…expectation, a strong belief that something will happen or not, it’s still an assumption. Where are the headlines from the SF conference? The second question is related to where funds are investing their risk dollars - not in the sector as many are just staying where they are “Waiting for Godot”.
TGIF, the fog has enveloped the immediate are – like the sector!
The cell therapy sector’s record over 5 sessions (of 40 covered companies): The RegMed and cell therapy sector closed POSITIVE on Thursday and Wednesday, NEGATIVE on Tuesday, Monday and last Friday:
· Thursday closed POSITIVE with 15 decliners, 22 advancers and 3 flat;
· Wednesday closed POSITIVE with 18 decliners, 20 advancers and 2 flats;
· Tuesday closed NEGATIVE with 21 decliners, 18 advancers and 2 flats;
· Monday closed NEGATIVE with 26 decliners, 13 advancers and 1 flat;
· Last Friday closed barely NEGATIVE with 20 decliners, 18 advancers and 2 flats;
- The iShares Nasdaq Biotechnology (IBB) is indicating a POSITIVE +0.24% in Friday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) is NOT indicating in Friday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) is indicating a POSITIVE +0.97% in Friday’s pre-open;
- The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.29% in Friday’s pre-open
Companies in my headlights:
Applied Genetic Technologies (AGTC) closed flat at $4.30 after Wednesday’s +$0.10 to $4.30 after Tuesday’s 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;
Capricor (CAPR) closed up +$0.07 to $1.73 after Wednesday’s +$0.01 to $1.66 after Tuesday’s -$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;
Pluristem (PSTI) closed down -$0.01 to $1.52 with 100 shares traded <3 month average = 480.1 K shares>. PSTI published a peer-reviewed article in the journal Scientific Reports, from the publisher of Nature, titled, “Human Placental-Derived Adherent Stromal Cells Co-Induced with TNF‑α and IFN‑γ Inhibit Triple-Negative Breast Cancer in Nude Mouse Xenograft Models.” The article is based on studies which examined the effect of PLX cells that had been induced with tumor necrosis factor alpha (TNF-α) and interferon-gamma (IFN-γ), on the proliferation of over 50 lines of human cancerous cells. The induction of the cells was carried out by adjusting their manufacturing process in order to transiently alter their secretion profile. Data from the first study showed that the modified PLX cells exhibited an anti-proliferative effect on 45% of the tested cancer cell lines, with a strong inhibitory effect on various lines of breast, colorectal, kidney, liver, lung, muscle and skin cancers. Comprehensive bioinformatics analysis identified common characteristics of the cancer cell lines inhibited by PLX cells. The pre-market indication is a positive +$0.21 or +13.82% - BUY;
Vericel (VCEL) closed flat at $6.45 with 992 K shares traded <3 month average = 570.6 K shares>. After a week’s range of $6.05 to $6.45 followed a short week’s range of ups and downs, $5.70 to $5.90 having ended 2017 at $5.45. Luckily VCEL expanded its debt accumulation rather than an offering as cash was needed for operations but, it still cost shares and warrants for the set-up– SELL;
Verastem (VSTM) closed up again +$0.05 to $3.01 with 593.6 K shares traded after Wednesday’s +$0.02 to $2.96 after Tuesday’s $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 = 876.7 K shares>. 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. The aftermarket indication is a positive +$0.03 or +1.01% – 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.