Indication intelligence, analysis and sector perception

Lower open expected. RegMed’s pre-open, positives and negatives are weighed by algorithmic programs

November 13, 2015 6:52am

Programmed trading, widely used by investment banks, pension funds, mutual funds, and other buy-side (investor-driven) institutional traders, to divide large trades into several smaller trades to manage markets is impacting trading and increasing share pricing sustainability and ultimately risk.

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DOW futures are DOWN -0.2% and NASDAQ futures are DOWN -0.3%

U.S. stock futures were listless Friday, as signs of pain in the retail sector put a monthly retail sales report and consumer sentiment index in the spotlight for Federal Reserve-watching investors.

Those indicated moves would put the key benchmarks on track for a weekly loss, after a string of six gains — the longest run since late 2014. The Dow and S&P 500 face weekly losses of roughly 2.5%, while the NASDAQ is looking at a 2.7% decline.

European equities traded lower as slumping commodity prices continued to worry investors.

The pan-European STOXX 600 indexes traded around 0.5 percent lower, after opening 0.3% down.

Asian stocks were battered on Friday, with risk-off sentiment in full swing amid sharp falls in the price of commodities and growing expectations that the Federal Reserve is on track for a rate hike in December for the first time in nearly a decade

Crude prices hit two-and-a-half-month lows on Thursday after the U.S. government reported a stockpile build four times above market expectations. West Texas Intermediate crude was last seen 0.5 percent lower at $41.55 a barrel in Asian trade.

Data docket: The Commerce Department‘s October retail sales report is due at 8:30 a.m. ET. Analysts expect a rise of 0.4%. The University of Michigan’s consumer-sentiment index is slated for release at 10 a.m. ET. The Bureau of Labor Statistics’ producer-price index for October, due at 8:30 a.m. ET, will provide a glimpse of the inflation outlook. A reading on U.S. business inventories in September is slated for 10 a.m. ET.

The RegMed sector closed NEGATIVE on Thursday, Wednesday and Tuesday following a POSITIVE close on Monday and last Friday.

The pattern emerges once again: i down followed by 3 up and today should be up - let't see:

Thursday closed NEGATIVE with 30 decliners, 11 advancers and 2 flats;

Wednesday’s NEGATIVE with 24 decliners, 17 advancers and 2 flats;

Tuesday closed NEGATIVE with 27 decliners, 14 advancers and 2 flats;

Monday’s POSITIVE close with 15 decliners, 26 advancers and 2 flats.

Algorithmic trading <electronic platforms> enter trading orders with pre-programmed instructions based on variables such as timing, price, and volume.

Many types of algorithmic or automated trading activities can be described as high-frequency trading (HFT), which is a specialized form of algorithmic interchange characterized by high turnover and high order-to-trade ratios.

Skipping to a different topic, as we plod through the “earnings cycle” … investors never like to hear negatives, and there have been enough financial releases and conference calls that are long on verbiage and short on platform <development> guidance making even the strongest investors yearn for the call to end and even question themselves.

Friday’s --- trading indications, stocks to watch:

Capricor (CAPR) closed DOWN -$0.27 to $3.97 with 23.2 K shares traded <3 month average = 21.69 K shares>. Another reckoning day as the CEO droned on about the science in the conference call for the first half -hour. I have been negative since March and more often correct about the inflation and deflation of the share pricing - time after time after time. There is just TOO much fluctuation with small volume. CAPR had a Q3/15 net loss of $2.9 M or -$0.18 per share with $17.2 M in cash. Be ready for an offering - Maintaining SELL;

BioLife Solutions (BLFS) closed DOWN -$0.11 to $2.36. BLFS reported <11/12> a Q3/15 net loss of -$1.1 M or -$0.09 per share. The increase in the loss is primarily the result of increased headcount and spending related to development and launch activities of the biologistex joint venture. Gross margin in the Q was 60% but, can it continue? BLFS closed Q3 with $5.3 M in cash – too low, will need to finance – Maintaining SELL;

Harvard Apparatus RM (HART) closed UP +$0.74 to $1.37 <after Wednesday’s +$0.02> to $1.37 with 19.61 M shares traded <3 month average = 152.9 K shares>. HART reported <11/12> that tissue engineering pioneer, Dr. Joseph P. Vacanti agreed to chair the new Scientific Advisory Board, the NASDAQ de-listing issue was re-set by the advance of the share pricing and HART reported significant confirmatory results for its 2nd Generation Bioengineered Esophagus, Trachea and Bronchus Implants followed by a Q3/15 net loss of -$2.3 M or -$0.19 per share with $8.2 M in cash. HART used net cash of $1.8 M for operations and $200 K for capital expenditures during Q3/15. For the first nine months of 2015, HART used net cash of $5.6 M for operations and $200 K for capital expenditures in the last nine 99) months. HART will need to recapitalize – share pricing is a short-term phenomenon. Put or push the financial results/loss per share earnings out of the way, there is a development future if … the porcine study results can be replicated? HART needs to explain more about the inflammation issue and the timing and more surrounding the specifics of their evidence of complete esophageal tissue regeneration from a QA/QC prospectus! Concern about the meteoric rise in share pricing as speculators will sell into strength;

Kite Pharma (KITE) closed DOWN -$1.83 to $75.81 reporting <11/12> a Q3/15 net loss of -$27.4 M or -$0.63 per share with $367 M in cash. The after-market forecasts a -$0.25 downdraft In Friday’s session – SELL;

Verastem (VSTM) closed DOWN -$0.07 <after Wednesday’s -$0.06 after Tuesday’s -$0.02> to $1.98with only 316 K shares traded <3 month average = 1 M shares> after reporting <11/9> a Q3/15 net loss of -$15.54 M or -$0.42 per share with $120.5 M in cash. Total cash per share = $3.26 and a book value of per share of $3.04. Oversold, 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.

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

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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.