Barely higher open expected; RegMed Investors’ pre-open, today’s menu is serving up the overbought to the oversold

August 12, 2016 7:58am

… A menu is a listing of options but, the appetite is limited

The chance that yesterday’s “ups” will stay winners is slim

… Leave the scripted conference call words and impressions outside the door

Companies in my headlights:  AXGN, BLFS, BSTG, CLBS, MESO and ONCE

I answer one question; in which company should investors put, keep and commit their money!

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Indexes and ETFs: The IBB (+0.17%) is UP, the IWM (-0.01) is DOWN and the XBI and XLV are NOT indicating

Dow futures are UP +0.02% and NASDAQ futures are UP +0.02%

U.S. stock index futures indicated a flat-to-higher open on Friday as traders a slew of data releases after Thursday saw the Dow, S&P and NASDAQ all close at record highs.

European stocks were flat after record closes, helped by an oil price rise, failed to offset negative sentiment caused by disappointing Chinese data.

Asian markets mostly advanced, with traders shrugging off a slightly disappointing deluge of economic data from China, focusing instead on record finishes in the U.S. markets and a rebound in oil prices.

Data docket: Retail sales are set to come out at 8:30 a.m. ET, and are expected to grow by 0.5% or 0.1% if automobiles are excluded. A producer price index is also due at 8:30 a.m. ET, with consumer sentiment and business inventories set to come out at 10:00 a.m. ET.

The stem, cell, gene and regenerative therapy (SCG&RT) sector closed POSITIVE on Thursday, NEGATIVE on Wednesday, NEUTRAL on Tuesday, NEGATIVE on Monday and POSITIVE last Friday.

The SCG&RT sector’s record after the last 5 days (of 43 covered companies):

• Thursday closed POSITIVE with 13 decliners, 27 advancers and 3 flats;
• Wednesday closed NEGATIVE with 36 decliners, 6 advancers and 1 flat;
• Tuesday closed NEUTRAL with 21 decliners, 21 advancers and 1 flat;
• Monday closed NEGATIVE with 23 decliners and 20 advancers;
• Friday closed POSITIVE with 11 decliners, 29 advancers and 3 flats;

Remembering Thursday’s post, related to my “proof-of-life” thesis -“The evidence is still questionable whether a public or listed company is alive when its prospects are uncertain.  How many are the “walking dead” without access to cash to sustain their development and G&A spending … without “killing” their stakeholder’s value or capital. 

• In August, investors should roll some holdings and clean the portfolio – it’s going to be a TOUGH Q3.

The purge and unwinding of holdings can be tough; current appraisals and future pricing won't hold up over the next 6 months.

• Too many companies are desperate to finance; remember, dilution always rolls downhill and discounts minimizes share pricing.

Every day traders bail out of relative “losing” positions and put cash instead into a better appreciator – it IS a trading market NOT an investing one.

As the week comes to an end don’t be suffocated by an accident of timing.

You’ve made it to the office, turned on the monitor, having just gotten your coffee and it hits you - what could be today’s trades? 

Watch list:

• The iShares Nasdaq Biotechnology (IBB) closed Thursday up +1.07% and is NOT indicating in Friday’s pre-market;
• The SPDR S&P Biotech ETF (XBI) closed Thursday up +1.64% and is NOT indicating in Friday’s  pre-market;
• The Health Care Select Sector SPDR ETF (XLV) closed down Thursday -0.58% and is NOT indicating in Friday’s pre-market;
• The iShares Russell 2000 (IWM) closed up +0.47% on Thursday and is DOWN -0.01% in Friday’s pre-market.

Companies in my headlights:

AxoGen (AXGN) closed UP +$0.69 to $8.95. Love the highs but, when a target is on a stock’s pricing – be aware. Monday started at $8.44, following Tuesday’s $8.30 and Wednesday’s $8.26 – a trader’s delight if holding - SELL;

BioLife Solutions (BLFS) closed DOWN -$0.06 to $2.02 after Wednesday’s $2.08 (+$0.01). BLFS announced Q2 financial results/earnings post a release about a ten year supply agreement with Bellicum (BLCM) then barely went up in a day’s range of $2.07 to $2.26. I am worried about the 6/31 $1.3 M cash position from a “draw-down” and interest costs (10%) – Maintaining SELL;

Biostage (BSTG) closed UP +$0.03 to $1.14. Cash position at 6/30/16 was $8.1 M.  I notice that the $20 M shelf registration was mentioned – BSTG is spending by their words $2 to $2.5 M a quarter which means they will be OUT of cash in Q1/17 – when they “hope” to launch an IND backed pivotal trial. One HUGE issue that wasn’t mentioned was registering the warrants issued in the last financing; there was a six month term to the offering.  I believe there will be a serious downside from this event, right about the time BSTG should be initiating a road show for a more than much needed financing -SELL;

Bluebird bio (BLUE) closed UP +$1.96 to $55.48 following Wednesday’s $53.52 (-$2.69) after Tuesday’s $56.21 and Monday’s $55.46, Friday’s $57.80 and Thursday’s $53.81.  Overbought, traders will be picking at the “ups”. The aftermarket indication is negative -$0.18 – BUY to SELL;

Caladrius Biosciences (CLBS) closed DOWN -$0.08 to $6.21 following Wednesday’s $6.27 (+$0.13) after Tuesday’s $6.14 (-$0.08). Don’t forget the recent 1 for 10 reverse split. Post financial results/earnings, their cash position was $17.7 M <low>. CLBS will be “looking” for an offering soon – Maintaining SELL;

Mesoblast (MESO) closed UP +$0.75 to $5.58. Love the company but, traders will be picking at the “ups” before a summer weekend based on Monday’s $4.25 followed Tuesday’s $4.41 and Wednesday’s $4.95 –SELL to come back;

Spark Therapeutics (ONCE) closed UP +$4.76 to $63.15. Good week even with financial results/earnings with a previous close of $58.49, Tuesday’s $59.25 and Monday’s $57.80. ONCE reported a loss of $28.7 M or -$1.04 per share in Q2. ONCE posted revenue of $1.3 M which also did not meet forecasts of $1.4 M, who is kidding whom. Spark Therapeutics shares have increased 33.7% since the beginning of the year. The stock has climbed roughly 46.6% in the last 3 months <since 4/8’s $33.67> - SELL

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.