October 14, 2016 7:09am

 

… After all the past three session’s volatility, it’s still a risk-on scenario

Yesterday’s downward movement should stimulate today’s upside

 

BUY: AGTC, FATE, VCEL and XON

SELL: BSTG

 

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!

 

 

The strange case of Dr. Jekyll and Mr. Hyde might make for a great read, but it’s far less fun when the sector acts like it’s a blueprint. Stock’s prices have been alternating between the dreadful and the benign.

 

 

Indexes and ETFs: The IWM (+0.41%) and XBI (+0.36%) are projected UP while the IBB and XLV are NOT indicating

Dow futures are UP +0.52% and NASDAQ futures are UP +0.46%

 

 

U.S. stock index futures pointed to a higher open on Friday, as investors gear up for a slew of earnings and data releases, while remaining on the lookout for speeches by key Fed officials.

European stocks extended gains in morning trade after stronger-than-anticipated inflation data from China helped to calm nerves over global growth prospects.

Asia markets finished mostly higher on the final trading day of the week, reversing some early losses, as investors weighed price increases in China and the possibility of a U.S. interest rate hike later in the year.

Data docket: PPI and retail sales due out at 8.30 a.m. ET. Business inventories and consumer sentiment data are also due at 10.00 a.m. ET.

  • Yellen will be speaking at 1:30 pm atthe Federal Reserve Bank of Boston's 60th economic conference, which is titled "The Elusive 'Great' Recovery: Causes and Implications for Future Business Cycle Dynamics". Aside from Yellen, Boston Fed President Eric Rosengren will also be speaking at the conference.

 

 

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

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

  • Thursday closed NEGATIVE with 31 decliners, 9 advancers and 3 flats;
  • Wednesday closed NEGATIVE with 36 decliners, 6 advancers and 1 flat;
  • Tuesday closed NEGATIVE with 32 decliners, 10 advancers and 1 flat;
  • Monday closed POSITIVE with 10 decliners, 33 advancers and 0 flats;
  • Last Friday closed NEGATIVE with 28 decliners, 15 advancers and 0 flat;

 

 

Remembering Thursday’s closing post, the “sector suffers lethargy – a lack of enthusiasm.  Stocks rise, stocks slip, swiftly flow the days … pullbacks offer an opportunity to provide fuel to propel the sector to its past pricing and the incremental upside from these ‘dog days’ ”

  • Stem, cell, gene and regenerative therapy (SCG&RT) sector stocks ended lower in choppy trading action after being down on Wednesday and Tuesday as volatility flared.

October has always been a volatile month for stocks.

  • Some stocks have been hovering at new lows.  Their recent crawl lower is a bad sign but, a good omen for a possible upside which to me suggests that sector equities will gradually appreciate even on a Friday.

Quarterly financial results <notice I didn’t say – earnings> season are about to start, it will be easier for investors to take a short -term view as my fear is that the Q3 numbers aren't going to look much better than the Q2 numbers.

 

 

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 +0.36% and is NOT indicating in Friday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) closed Thursday up +0.11% and is projected UP +0.36%  in Friday pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) closed up +0.04% Thursday and is NOT indicating in Friday’s pre-market;
  • The iShares Russell 2000 (IWM) closed down -0.83% on Thursday and is projected UP +0.41% in Friday’s pre-market.

 

 

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed DOWN -$0.13 to $8.55 following Wednesday’s $8.68 after Tuesday’s $9.35 and Monday’s $9.60, Friday’s $9.45 and Thursday’s $10.07. AGTC has a substantial cash position of $172.7 M, revenue, no debt, and a named partner – Biogen (BIIB), multiple trials as well as pre-clinical programs and on-going research in a hot universe.  A book value per share of reflects a $9.87 value and NO need for a capital markets offering. A float of 9.88 M shares with 52.30% held by institutions and 18.05 M outstanding with 51.15% held by insiders is a positive- OVERSOLD – Maintaining BUY;

Biostage (BSTG) closed DOWN -$0.004 to $0.90. NO IND or trials with the FDA filing delay attributed to further required studies.  I was WRONG concerning the question of warrants from the 5/16/16 financing at $1.76 being required to be registered in a six (6) month period.  The prospectus terminology “In connection with the offering, the company <BSTG> will issue … 2.8 M registered shares of common stock at a purchase price of $1.7625 per share.  Concurrently in a private placement, for each share of common stock purchased by an investor, such investor will receive from the company an unregistered warrant to purchase one-half of a share of common stock.  The warrants have an exercise price of $1.7625 per share, will be exercisable six months from the date of issuance, and will expire five years from the initial exercise date”.  My “MISTAKE” was transposing - registered for exercisable – mea culpa!  Back to the real issue, what’s going to propel the share pricing to a needed financing (?) - Maintaining SELL;

Intrexon (XON) closed DOWN again -$0.27 to $27.29 after Wednesday’s $27.56 (-$1.81), Tuesday’s $29.37, Monday’s $30.49, last Friday’s $29.69. Another Zika outbreak has been reported in Miami-Dade; the county has reported 156 mosquito-borne and 237 travel-related cases so far. The aftermarket indication is positive +$0.05 – Maintaining BUY;

Fate Therapeutics (FATE) closed DOWN again -$0.16 to $2.53 after Wednesday’s $2.69 (-$0.26). Bad days should come to an end; Tuesday’s $2.95, Monday’s $2.94, last Friday’s $2.86 and the previous Thursday’s $2.97. I have liked the management of this company, so I am partial but, share pricing speaks for itself. OVERSOLD – Maintaining BUY;

Vericel (VCEL) closed DOWN again -$0.03 to $2.41 following Wednesday’s $2.44 (-$0.12) after Tuesday’s $2.56 (-$0.45). As I stated, I haven’t been a personal fan but, in this case, with NO capital market access – the use of an ATM is a stopgap to the future. Cowan and Company is a great banker to have as an advisor. They now have cash via access to stock sales, not a traditional offering but, an at-the-market move?  OVERSOLD – Maintaining BUY;

 

 

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.