Indication intelligence, analysis and sector perception

RegMed Investors’ (RMi) pre-open: risk grows in share pricing’s upside

February 27, 2018 7:46am

As I had stated, “There is a sense that … yesterday’s move to the upside was overdue yet would contribute to a decline in the ensuing sessions!”

Volatility matters when gains outstrip the fundamentals and technicals; the sector may come to understand its vulnerabilities or maybe not although the inevitable is the downside.

Quarterly financial results: AXGN and MESO - 2/28/18

Pre-open indications: 2 BUY and 5 SELLs

Lower to flat open expected

Dow futures are DOWN -0.17% (-43 points) and NASDAQ futures are down -0.18% (-13 points)

U.S. stock index futures fluctuated ahead of Tuesday's open, showing signs of pulling back from the previous session's highs.

European stocks traded higher

Asian markets closed mixed, with several indexes giving up early gains as mainland China stocks finished the day in negative territory.

Issues to be faced at the open: earnings, data and news from the U.S central bank are due to shake up sentiment.

Data docket: durable goods and advanced economic indicators come out at 8:30 a.m. ET, followed by the S&P/Case-Shiller House Price Index and the FHFA House Price Index, both due at 9 a.m. ET. Shortly after that, consumer confidence comes out at 10 a.m. ET as well as the Richmond Fed manufacturing activity survey, while the Dallas Fed's Texas Service Sector Outlook Survey comes out at 10:30 a.m. ET.

The economy: Jerome Powell, new chair of the U.S. Fed is set to address Congress on Tuesday morning, where the former Fed governor is set to shed some light on the current state of the U.S. economy, and monetary policy.

Been where, done what ...

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

· Monday closed POSITIVE with 17 decliners, 20 advancers and 3 flats;

· Friday closed POSITIVE with 17 decliners, 21 advancers and 2 flat;

· Thursday closed POSITIVE with 10 decliners, 28 advancers and 2 flats;

· Wednesday closed POSITIVE with 13 decliners, 24 advancers and 3 flats;

· Last Tuesday closed NEGATIVE with 26 decliners, 12 advancers and 2 flats;

Henry’omics:

From last night’s newsletter, “… the velocity of pricing movement. Sector opened up, was barely positive at the mid-day and1:30 p.m. was the advent of a witching downturn closing barely to the upside. Volume and advance/decline lines deteriorate with more volatility on the horizon.”

Another winning session for sector equities was hanging in the balance on Tuesday, with futures pointing to a lower open ahead of new Fed Chairman Jerome Powell’s first day of testimony in front of lawmakers.

Attention will focus squarely on what Powell will say about inflation and the pace of interest-rate hikes. <MarketWatch>

Investors are chiefly looking for what the new Fed chief will say about how fast the central bank might raise interest rates if inflation starts to pick up. Powell will testify to the Senate Banking Committee on Thursday.

Today’s indications:

The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Tuesday’s pre-market;
The SPDR S&P Biotech ETF (XBI) is NOT indicating in Tuesday’s pre-market;
The Health Care Select Sector SPDR ETF (XLV) is indicating a POSITIVE +0.03% upside in Tuesday’s pre-open;
The iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.21% upside in Tuesday’s pre-open

Companies in my headlights:

AxoGen (AXGN) closed up +$0.55 to $29.50 after Monday’s +$0.30 to $28.95 with low 174.7 K shares traded <3 month average = 291.9 K shares>after Thursday’s +$0.15 to $28.65 after Wednesday’s +$0.75 to $28.50 with 227.2 K shares traded after Tuesday’s +$0.35 to $27.75 with 267.2 K shares traded. A little too “toppy” for me in eleven (11) sessions the shares have jumped from $24.40, that’s a $5.20 or a +17.6% premium. Also quarterly results day - Maintaining SELL;

bluebird bio (BLUE) closed down -$4.90 to $201.50 after Friday’s +$4.85 to $206.50 with low 424.8 K shares traded <3 month average = 979.2 K shares>after Thursday’s down -$6.20 to $201.20 with 1 M shares traded after Wednesday’s +$1.95 to $207.40 in a day’s range that went as high as $213.20 before it sold-off with 303.4 K shares traded after Tuesday’s -$7.90 to $205.45 with low volume of 593.1 K shares traded. Quarterly results missed expectations, BLUE’s shares have risen 16% since the beginning of the year. BLUE released Q4/17 earnings last Wednesday without warning or holding a conference call. Nevertheless, is there an arrogance factor as BLUE had to issue and update on Thursday evening. CEO Leschly has laid out the BLUE's plans for filing three (3) marketing applications over the next two years: with regulatory authorities in the next two years: LentiGlobin in TDT in 2018, Lenti-D in [cerebral adrenoleukodystrophy] in 2019 and, with its partners at Celgene, bb2121 in multiple myeloma, also in 2019. What about 2018 (?), they’ll still be spending -Maintaining SELL;

Fate Therapeutics (FATE) closed up +$0.30 to $12.06 after Friday’s +$1.18 to $11.76 with 1.05 M shares traded <3 month average =671.2 K shares traded>. Like the company but traders are always on the prowl for strength and upside associated with volume; in ten (10) sessions, the stock has risen from $7.80 – a $8.10 or -67.1% premium – Maintaining SELL;

Caladrius Bioscience (CLBS) closed up +$0.28 to $4.56 after Friday’s flat at $4.26 with 2.57 K shares <3 month average =49.73 K shares>traded after Thursday’s +$0.24 to $4.28 with 45.5 K shares traded. Seven (7) sessions ago, CLBS was trading at $3.78, maybe time to profit and maybe come back after quarterly results, that’s a $0.76 or 16.6% premium in the shares price – Maintaining SELL;

Mesoblast (MESO) closed up +$1.11 to $7.30 with 157.2 K shares traded <3 month average = 92.3 K shares>. Quarterly results are today and spending and cash position will be “illuminated”; the aftermarket indication is a negative -$0.65 or -8.90% - BUY to SELL;

MiMedx (MDXG) closed down -$0.48 to $7.35 with 23.96 M shares traded <3 month average = 2.58 M shares> after Friday’s -$1.05 to $7.83 with 14 M shares traded after Thursday’s -$0.17 to $8.88 with 5.57 M share traded with an aftermarket indication of +$0.12 or +1.63%. MDXG has been shaken by short seller drama and a now current issue of accounting – what’s new. There is always a bounce back as 21/1 opened at $17.13, thus there is a wide upside margin. A contrarian – Maintaining BUY;

Vericel (VCEL) closed up +$0.80 to $8.10 with 1.13 M shares traded <3 month average = 661.2 K shares>. Strength these days is to be sold into, there is a +$1.15 or +14.2% premium in three (30 sessions – 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.

35 companies, 1 interpreter!

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Editor and Publisher ... Henry McCusker enters his tenth (10th) year at RegMed Investors with past experience in sell-side analysis, buy-side management, corporate management and due diligence.

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Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.