October 17, 2016 6:20am

 

… It’s time for some comeuppance

We have already bent over backwards to dance the limbo …

 

BUY: AGTC, ONCE and XON

SELL: BLUE and STML

 

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 carbon copy. Stock pricing has been alternating between the dreadful and the benign.

 

 

Indexes and ETFs: The IWM (-0.36%), XBI (-0.25%),XLV (-0.16%) and the IBB (-0.03%) are projected DOWN

Dow futures are DOWN -0.35% and NASDAQ futures are DOWN -0.42%

 

U.S. stock index futures pointed to a lower open on Monday, as investors geared up for a slew of corporate earnings, while continuing to digest the latest remarks from Federal Reserve Chair Janet Yellen.  

European markets were lower in morning trade as investors remained cautious ahead of earnings, key data and a European Central Bank (ECB) meeting later this week.

Asian markets began the week on the back foot, with gaming shares across the region taking a hit after reports that China was detaining several staff at one of Australia's largest casino companies.

 

Data docket: The Empire State survey, due out at 8.30 a.m. ET, and industrial production figures, expected at 9.15 a.m. ET.

 

 

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

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

  • Friday closed NEGATIVE with 29 decliners, 12 advancers and 2 flats;
  • 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;
  • Last Monday closed POSITIVE with 10 decliners, 33 advancers and 0 flats;

 

 

Remembering Friday’s closing post, the “The sectors missed a vaccination for sentiment disease … since the sector has been purposefully inoculated with a downside trading infection.”

  • 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.

By dropping in October, the stem, cell, gene and regenerative market creates the pre-conditions for a mild rally by the end of the week.

  • Financial results/earnings are some time away as Athersys (ATHX) starts the reporting on 11/9, how the SCG&RT sector moves this week could determine whether key indexes correct lower or higher.

The recent weakness is not, in and of itself, something of which to be afraid - If anything, it should be celebrated.

  • Friday’s wrap-up: The day’s sector <43 companies> 12 gains were HIGHER <+0.52% to +3.95% versus Thursday’s +0.12% to +3.84% with increasing volume, while the downside ranged LOWER <-0.53% to -13.29% versus Thursday’s -0.23% to -5.95%> also with increasing volume.

The number of appreciating companies also increased <9 to 12> by a hair as the sectors down sliding <31 to 29> were numbered on Friday.

 

 

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 Friday down -1.86% and is projected DOWN (-0.03%) in Monday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) closed Friday down -2.09% and is projected DOWN -0.25% in Monday pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) closed down -0.67% Friday and is projected DOWN -0.16^in Monday’s pre-market;
  • The iShares Russell 2000 (IWM) closed down -0.41% on Friday and is projected DOWN -0.36% in Monday’s pre-market.

 

 

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed DOWN-$0.22 to $8.33 after Thursday’s $8.55 (-$0.13) (following Wednesday’s $8.68 after Tuesday’s $9.35 and last Monday’s $9.60. 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;

bluebird bio (BLUE) closedown -$8.67 to $56.67. It hasn’t been a good week for BLUE with a trading range starting at $73.59 and ending at $56.53 with a week’s total of 10.357 M shares traded. A whole lot of volume has been experienced since 9/9. As I had stated on Friday, BLUE got downgraded by Cantor Fitzgerald joining UBS, RBC, GS and Tucker Anthony Sutro however, Maxim and Morgan Stanley did initiate in past months. The last time we saw the $49’s were 7/20 at $49.82 and 6/27’s $49.39.  The downside volume concerns me, it’s too strong.  Let it “dangle” for contrarians to start “fishing” to develop some strength – SELL;

Intrexon (XON) closed DOWN again -$0.61 to $26.88 following Thursday’s $27.29 (-$0.27) after Wednesday’s $27.56 (-$1.81), Tuesday’s $29.37 and last Monday’s $30.49. 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;

Spark Therapeutics (ONCE) closed DOWN -$1.21 to $55.70. ONCE presented data at the American Academy of Ophthalmology 2016 Annual Meeting reinforce efficacy & durability of voretigene neparvovec (VN) in RPE65-mediated inherited retinal disease. One year after administration, the mean improvement among all nine subjects, as measured by the primary endpoint, a multi-luminance mobility test was 2.1 lux levels. Anytime you get a p-value of .006, something must be happening!  Sustaining the improvement at 2 years is a big deal and the visual field improvement is important – BUY;

Stemline (STML) closed UP +$0.17 to $13.60. It’s been a very good pricing quarter for STML, starting 7/1 at $6.75, 8/1 at $7.40, 9/1 at $8.15 and 10/3 at $10.55 with reasonably consistent volume. I take my “winnings” and - 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.