November 16, 2015 7:07am

 

The sector has a lack of positive news going for it as the focus continues on indexes, ETFs and the fear gauge (VIX) along with its lackluster advancement.As one might expect after what just happened in Paris, stocks could be set for a tough start to the week. Not only in the US … but just about everywhere!

Henry’s “5” Monday trading picks. 

 

 

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DOW futures and NASDAQ futures are UP +0.3%

 

 

U.S. stock futures struggle for direction early Monday, while other global equity markets slump, as analysts warn of choppy trading after terror attacks in Paris

European equities were trading broadly flat  as traders digested the potential impact of a series of terrorist attacks in Paris on Friday night.

Asian stocks endured a sell-off, with airline operators and tourism-related plays among the hardest-hit, as sentiment was badly dented by Friday's brutal terrorist attacks in Paris.

 

Data docket: a November reading for the Empire State Manufacturing Survey is due at 8:30 a.m. ET. The survey provides details on the health of New York state’s manufacturing sector.

 

 

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

Friday closed with 26 decliners, 15 advancers and 2 flats following Thursday’s NEGATIVE close with 30 decliners, 11 advancers and 2 flats;

 

 

Friday closed NEGATIVE after a POSITIVE mid-day following a NEGATIVE open – I hope for a POSITIVE Monday!

  • Investors should take notice but, remember it is a trading sector with a short term horizon!

The stem, cell and gene therapy RegMed (SCGT&RM) sector stocks face more pressure as financial results  from the already beaten-up Q3 continue into another week with just a few left.

  • All three indexes suffered steep losses last week with the Dow down 3.7%, the S&P 500 falling 3.6%, and the Nasdaq dropping 4.3% as the SCGT&RM sector suffered the yet another loss of the month.

The iShares Biotechnology Stocks ETF (IBB) closed UP Friday +3.53 or +1.10% following last Monday’s advance of +0.34 or +0.10%; the NASDAQ Biotechnology index (NBI) closed Friday UP +36.28 or +1.08% following last Monday’s advance of +2.30 or +0.07%; the Russell 2000 (IWM) closed Friday DOWN -0.83 or -0.72% following last Monday’s decline of -1.40 or -1.17% and the SPDR SD&P Biotech ETF (XBI) closed Friday -0.05 or -0.07% following last Monday’s decline of -1.40 or -1.17%.

  • My fear gauge – The CBOE Volatility Index (VIX) closed Friday above 20 following Monday’s below 15 and a week from Friday’s above 16.

Shares of Histogenics (HSGX -12.17%), Intrexon (XON -8.73%), Harvard Apparatus RM (HART -8.03%) – after a big run-up and Neuralstem (CUR -5.22%) were savaged <Friday>following last week’s financial results/earnings reports, which reflected a growing awareness of changing sentiment as investors in some cases sell into strength or just cut and run.

  • Fibrocell (FCSC +4.37%), Avalanche Biotech (AAVL +3.86%) as Applied Genetic Technologies (AGTC) rallied an average of more than 3-4%%, matched against those who feel an average -8- 12%.

So far, out of the 43 <covered> companies in “our’ universe – none have provided a glimpse or guidance for the fourth quarter outlook.

 

 

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

  • Capricor (CAPR) closed FLAT at $3.97 <with 7.1 K shares traded DOWN -$0.27> with 7.1 K shares traded <3 month average = 23.2 K shares>.  Another reckoning day is on the horizon 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 -$0.09 <after Thursday’s -$0.11> to $2.27. 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 – it will need to finance – Maintaining SELL;
  • Harvard Apparatus RM (HART) closed DOWN -$0.11 to $1.26 <after being UP +$0.74 to $1.37 <after Wednesday’s +$0.02> to $1.37> with 5.09 M shares traded <3 month average = 531.4 K shares>. HART will need to recapitalize – recent 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!  Friday’s aftermarket reflected a +$0.03 increase. Still have a concern about the meteoric rise in share pricing as speculators will sell into strength;
  • Kite Pharma (KITE) closed UP +$1.52 <after being DOWN -$1.83> to $81.33. KITE reported <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 -$1.53 downdraft from Friday’s session – Maintaining SELL;                                                                                                                                                            
  • Verastem (VSTM) closed DOWN -$0.01 <after Thursday -$0.07, after Wednesday’s -$0.06 after Tuesday’s -$0.02> to $1.97 with only 214.4 K shares traded <3 month average = 996.5 K 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.