October 6, 2016 7:07am

 

Yesterday the sector was up dramatically, time for a downrange move?

Risk is a four letter word … in more ways than this … while Novartis (NVS) “dissolves” its cell and gene therapy unit

 

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

 

Where is “our” universe going today?  If you are not a subscriber, you won’t know the morning’s indications and who is in the headlights.

 

I say what others won't, so you can do what others can't!

 

 

Ben Graham used to talk about the stock market being a cross between a voting machine and a weighing machine. On any given day, economic actors 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 more aggressive. That is the voting machine of the market. In the short run, values can be pretty senseless if one side or the other decides to be aggressive in their buying or selling.

 

Once we get through quarterly financial results <notice I didn’t say – earnings> season, it will be easier for investors to take a short -term view, but my fear is that the Q3 numbers aren't going to look much better than the Q2 numbers.

 

 

Indexes and ETFs: The IWM (-0.13%) and XLV (-1.32%) and (IBB (-1.10%) and the XBI (-0.99%) are DOWN

SELL: ADRO, BSTG, BLUE, FCSC and VSTM

Dow futures are DOWN -0.16% and NASDAQ futures are DOWN -0.17%

 

U.S. stock index futures pointed to a flat open on Thursday morning as traders eyed the release of data and looked towards Friday's highly anticipated jobs report.

European stocks were mixed in morning trade, despite buoyant trade in Asia and the U.S., as oil prices came off their highs.

Asian markets advanced, bolstered by overnight rises in oil prices, while shares of South Korea's Samsung Electronics jumped after a U.S. activist investor called for a corporate overhaul.

 

Data docket: initial claims are due at 8:30 a.m. ET. Traders have focused all week on the scheduled Friday morning release of September employment data, which should add weight to the case for an interest rate hike sooner rather than later.

 

 

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

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

  • Wednesday closed POSITIVE with 4 decliners, 35 advancers and 4 flats;
  • Tuesday closed NEGATIVE with 30 decliners, 12 advancers and 1 flat;
  • Monday closed NEGATIVE with 26 decliners, 14 advancers and 3 flats;
  • Friday closed POSITIVE with 12 decliners, 29 advancers and 2 flats;
  • Last Thursday closed NEGATIVE with 35 decliners, 7 advancers and 1 flat;

 

 

Remembering Wednesday’s closing post, “Novartis (NVS) has been making some changes to its research and development arm.   At the end of August, NVS dissolved its Cell and Gene Therapy Unit and terminated a number of employees and executives attached to the group.”

  • Another potential partner bites the dust for the sector …

So far, October has been a volatile and rough month for stocks! 

  • Intraday volatility has been all over the map … there is too much anxiety in the sector now and this volatility is directionless. Sure enough, we’re always seeing some stumbles yet, I am concerned on bigger falls.

I keep pointing out that, everything is restorative. “You have to look at the overall market environment to be ready to contrast “our” universe and compare the sector.

 

Filling our pocket on Wednesday, but not our wallets was:

•   Fibrocell (FCSC) +12.22% after Tuesday’s -9.38% after Monday’s -3.44%;

•   Capricor (CAPR) +7.91% after Tuesday’s -4.24%;

•   Stemline (STML) +7.77%;

•   Regenxbio (RGNX) +7.68%;

•   Biostage (BSTG) +5.71% after Tuesday’s FLAT at $1.05;

 

 

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 Wednesday up +0.88% and is NOT indicating in Thursday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) closed Wednesday up +1.61% and is NOT indicating in Thursday pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) closed up +0.39% Wednesday and is DOWN -1.32% in Thursday’s pre-market;
  • The iShares Russell 2000 (IWM) closed up +0.60% on Wednesday and is DOWN -0.33% in Thursday’s pre-market.

 

 

Companies in my headlights:

Aduro Biotech (ADRO) closed UP +$0.52 to $13.64 following Tuesday’s $13.12 ($0.32) and Monday’s $12.80. Last week was good starting at the previous Monday’s $13.24, $13.66, Wednesday’s $13.03 and last Thursday’s $12.04. The chart looks “shaky” and the short position has risen from <6.42 M to 6.91M> in a float of 24.8 M shares. But, the run is usually fleeting – Maintaining SELL;

bluebird bio (BLUE)closed UP +$3.57 to $73.12 following Tuesday’s $69.55 (+$1.63) after Monday’s $67.92 (+$0.14) post Friday’s $67.78 (+$1.37). A quick ride, a hurdle jumped but, the pace gets questionable – Maintaining SELL;

Biostage (BSTG) closed UP +$0.06 to $1.11 on 66.8 K share volume – solid as the 3 month average is 116.5 K shares. BSTG is supported unfortunately by day trading and any upside is usually sold into - maybe not today but it’s usually in the cards. A lot of questions abound; I might have an inner ear infection but, I can still hear. The silence is deafening - Have the warrants from the $1.76 offering been registered?  Where is the peer reviewed article? Will there be a big increase in the quarterly loss, especially as a fund raising is needed as BSTG spends itself into a Q1/17 zero balance? Still NO IND or any trials on-going. A number of questions need to be answered  – SELL;

Fibrocell Sciences (FCSC) closed UP +$0.07 to $0.70. However, FCSC on Wednesday received notice from the NASDAQ that the company is not in compliance with the minimum bid price as the stock has been below $1.00 per share for 30 consecutive business days. The company has a period of 180 calendar days, or until April 3, 2017, to regain compliance. No immediate effect but, I’d dump on negativity – SELL;

Verastem (VSTM) closed UP +$0.06 to $1.39. VSTM is too capricious about its pricing as Tuesday’s $1.33, Monday’s $1.32 versus last week’s – Friday’s $1.33, Thursday’s $1.32 and the previous Wednesday’s $1.36. I use to depend on the cash per share number but, even that is down to $2.51 and quarterly financial results will show increases in spending and NO platform news. Never a trusting person, take the $0.08 and be happy for another day – 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.

Henry’s comments are for informational purposes only and are not a substitute for personalized advice. Consult your advisor about what is best for you.