July 30, 2019 8:22am
While net losses lower per share pricing in two (2) (QURE and CRSP) releases and revenues lag estimates (CRSP) in one (1)
We are back to expectation and anticipation
Pre-open indications: 2 BUY and 3 SELL
The remainder of the month’s trading sessions will be critical for the RegMed sector which will establish whether expectation of August and quarter’s (Q2) initiate a slow downdraft.
Whether information or intelligence is good, bad or somewhere in between; I put into context what are the pre and post effects of Q2 LPS (loss-per-share) results.
Dow futures are DOWN -0.36% (-97 points), S&P futures are DOWN -0.45% (-14 points) and NASDAQ futures are DOWN -0.69% (-57 points)
U.S. stock index futures indexes were slightly lower, ahead of a key meeting by the Fed;
European stocks traded lower as investors digested earnings and the pan-European Stoxx 600 slipped around 0.9% by mid-morning;
Asia Pacific stocks edged up as investors awaited developments from U.S.-China trade talks this week in Shanghai. The Bank of Japan also opted to keep monetary policy steady;
Data docket: personal and consumer spending figures out at 08:30 a.m. ET; as well as pending home sales and consumer confidence numbers due at 10:00 a.m. ET.
Traders are focused on the upcoming Fed meeting, which starts Tuesday. Market expectations point to a quarter-point rate cut on Wednesday, which would be the first rate cut in a decade.
Q2 earnings update:
- “Our” universe earnings kicked-off with uniQure NV (QURE) and CRISPER Therapeutics (CRSP); listing to 8/1 with Intellia Therapeutics (NTLA), Verastem Oncology,(VSTM), BioMarin Pharmaceuticals (BMRN), Ultragenyx Pharmaceuticals (RARE) and Sage Therapeutics (SAGE); on 8/2 Stemline Therapeutics (STML) pre Alnylam Pharmaceuticals (ALNY) and AxoGen (AXGN) and Audentes Therapeutics (BOLD) on 8/6, Athersys (ATHX) on 8/7 and Organovo (ONVO) with Adverum Biotechnologies (ADVM) on 8/8.
Once we get through quarterly LPS (loss-per-share) financial results <notice I didn’t say – <earnings season>, it will be easier for investors to possibly recognize a short or even a near-term view; but my fear is that Q2 numbers aren't going to look much better than the Q1/19 numbers.
Today’s relevancy … Ben Graham used to talk about the stock market being a cross between a voting machine and a weighing machine.
During “earning’s” season, traders vote by buying and selling shares, and in the short run, the trades happen at the levels dictated by whether the buyers or sellers are motivated by meeting “street” expectation versus LPS (loss-per-share) as compared to net income.
That is the voting machine of this sector. In the short run, values can be pretty senseless if one side or the other decides expectation never met anticipation!
From Monday’s evening post, “smack down; the sector and NASDAQ felt the cold floor as volumes also bottomed” …
- The NASDAQ was down -36.88 or -0.44% to 8,293.33;
- The IBB closed up +0.09% while the XBI closed down -0.22%;
- The close was negative with an A/D Line of 11/31 and 1 flat and 2 acquired;
- The range of the 11 upside was +0.34% (EDIT) to +7.11% (PSTI) while the 31 downside ranged from -0.26% (CLLS) to -7.95% (CUR -$0.19);
- 2 out of the 11 upside had higher than the 3 month average volume;
- 6 out of the 31 downside had higher than the 3 month average volume;
- Q3/19 so far: there were 8 positive, 1 holiday and 12 negative closes;
Companies in my headlights – It’s your decision; I provide an idea and context:
Pluristem (PSTI closed up +$0.36 to $5.42 after Friday’s +$0.63 and Thursday’s +$0.27 to $4.53 post 1-for-10 reverse) – expect an offering I the future - Maintaining SELL;
Solid Bioscience (SLDB closed down -$0.53 after Friday’s +$1.49 and a private placement) – Maintaining SELL;
CRSPER Therapeutics (CRSP closed down -$0.60 after poor earnings following Friday’s +$2.26 after Thursday’s +$0.52) –SELL to BUY on increasing cash position;
Editas Medicine (EDIT closed down -$0.09 after Friday’s +$1.26) chart looks very “peaky” – Maintaining SELL;
ReNeuron (RENE.L has a positive pre-market timing differential of +2.00 having closed up +$5.00 on Monday after Friday closed flat at $230.00 and Thursday’s -$5.00) – 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.