RegMed Investors’ (RMi) pre-open: sentiment is an attitude which allows momentum to be measurable

January 24, 2018 7:58am

Celgene’s (CELG) acquisition of Juno therapeutics (JUNO) rates applause; yet what does it say about sector equities that followed the curve and played catch-up on valuation …

Or is this a sector whose pricing rocketed but, is now be deemed to be problematic after dramatic upsides with a here today and gone tomorrow appreciation rattled by profit-taking?

Are you willing to trade based on this emotion; consider scenario analysis?

Out and about: Stemline (STML) prices 3.7 M share offering at $14.00 per share

Pre-open indications: 7 SELLs and 1 BUY

Positive open expected

Dow futures are UP +0.33% (+86 points) and NASDAQ futures are UP +0.18% (+12.25 points)

U.S. stock index futures posted modest gains ahead of Wednesday's open.

European stocks fluctuated around the flat line.

Asian indexes closed mostly higher, following significant gains seen in the yesterday’s session

Issues that will affect the trading day: will the rebound of the RegMed, gene, stem and cell therapy sector continue …

Data docket:  the FHFA House Price Index at is due 9 a.m. ET; the IHS Markit flash U.S. composite purchasing managers' index (PMI) data at 9:45 a.m. ET; and existing home sales at 10 a.m. ET.

Issues on the political front: Concerns surrounding global trade weighed on sentiment after President Donald Trump approved tariffs on solar cells and washing machines imported to the U.S. on Tuesday.

Last week’s RegMed, stem and cell therapy sector’s record over 5 sessions (of 40 covered companies):

·         Tuesday closed POSITIVE with 9 decliners, 27 advancers and 3 flats;

·         Monday closed POSITIVE with 9 decliners, 26 advancers and 5 flats;

·         Friday closed closely POSITIVE with 18 decliners, 21 advancers and 1 flat;           

·         Thursday closed NEGATIVE with 20 decliners, 15 advancers and 5 flats;

·         Last Wednesday closed barely POSITIVE with 18 decliners, 19 advancers and 3 flats;

Henry’omics:

From Tuesday night’s closing bell post, “… exuberance is a noun associated with a transformative event and an expression; the question is, are investors confident that sector equities will keep going up? Speculation is at its peak until it isn’t and that’s with clinical risk at an all-time high.”

Reiterating, “As much as I like (love) the appreciative upside, I feel cautious in this time frame re pricing sustainability. Individual equities have relied upon the JUNO “effect” for their upswing without any news of their own! With all the gains, hedges and day traders and some funds will lock-in these quick gains keeping a position and giving themselves a factor of appreciation for the month.”

“I believe profits will start to be taken and exercised in the push of the sell button.”

Today’s indications:

• The iShares Nasdaq Biotechnology (IBB) is indicating a POSITIVE +0.02% 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 NOT indicating in Wednesday’s pre-open;
• The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.09% in Wednesday’s pre-open

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed up +$0.10 to $4.25 after Monday’s +$0.05 to $4.15 with 31.6 K shares traded <3 month average = 102.3 k shares> after Friday’s +$0.10 to $4.10 with 57.8 K shares traded, Thursday, AGTC closed up +$0.05 to $4.00 after Wednesday’s -$0.05 to $3.95. AGTC has clinical trial timing issues and spending woes – Maintaining SELL;

bluebird bio (BLUE) closed up +$5.55 to $200.20 with 1.5 M shares traded <3 month average = 953.2 K shares> after Monday’s +$18.70 to $194.65 with 2.48 M shares traded after Friday’s -$6.15 to $175.95 with 739.6 K shares traded up +$6.85 to $182.10 with 1 M shares traded after Thursday’s $182.10 and last Wednesday’s +$11.90 to $175.25 with 1.8 M shares traded. During the last week, the stock ran from $163.35 to $182.10 and then there was Friday’s $175.95. The pre-market indication is a negative -$0.15 or 0.07% yet, after all the “ups’ of $24.25 or =12.1% in three (3) sessions – greed will set in – Maintaining SELL;

Capricor (CAPR) closed down -$0.03 to $1.63 with 166.1 k shares traded <3 month average = 724 K shares> after Monday’s +$0.03 to $1.66 with 143.2 K shares traded.  CAPR over the weekend “scraped” their website promoting its director of finance to CFO, while he changed his Linked-In profile to reflect his new CFO status there was NO public release to shareholders/investors and NO 8-K to reflect a corporate officer change – TYPICAL for CAPR’s habit of NOT reporting the facts. Is this an SEC reporting issue? Monday’s calls to CAPR’s new CFO were NOT returned! Also since they desperately need to finance, a golden axiom is to NOT change CFOs – they have “real” knowledge of their MANY short-comings – Maintaining SELL;

Fate Therapeutics (FATE) closed up +$0.83 to $9.12 after Monday’s +$0.92 to $8.29 with 902.3 K shares traded <3 month average = 470.3 K shares>. The is a $2.57 or +28.2% premium in six (6) sessions on the table and there was a negative aftermarket indication of -$0.12 or -1.32%; however I wouldn’t chase the ups” although I like this pricing – Maintaining SELL;

Regenxbio (RGNX) closed up +$2.35 to $29.75 with 478.2 K shares traded <3 month average =392.2 K shares>. RGNX announced an agreement with FUJIFILM Diosynth Biotechnologies (FUJIFILM) for the manufacture of REGENXBIO’s lead product candidates, including RGX-314 and RGX-501, which will support late-stage clinical development and early commercialization. The aftermarket indication is a positive +$0.45 or +1.61% - BUY;

Stemline Therapeutics (STML) closed down -$0.20 to $14.15 after Monday’s +$0.70 to $14.25 with 309.8 K shares traded <3 month average = 278.6 K shares>. STML has announced an offering of 3.7 M shares. In the aftermarket, STML’s negative aftermarket is a negative -$0.20 or -1.41% - Maintaining SELL;

uniQure (QURE) closed up +$1.16 to $20.87 with 473.2 K shares traded <3 month average = 620.3 K shares> after Monday’s +$1.72 to $19.71 with 571.4 K shares traded after Friday’s -$0.01 to $17.99.  With a $2.88 or +13.7% “pot” on the table, what’s in the cards to hold it up? The aftermarket indication is a negative -$0.09 or -0.43% – Maintaining SELL;

Verastem (VSTM) closed up +$0.21 to $3.49 with 963.3 K shares traded after Monday’s +$0.16 to $3.28 with 742 K shares traded <3 month average =887.7 K shares>.  I wouldn’t be chasing any of the ups, VSTM is down in the aftermarket +$0.01 or +0.29% - Maintaining SELL;

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.