November 4, 2016 7:07am

 

There is a lot more downside to be reckoned with, as there is still negative momentum beneath the surface of the sector’s sentiment

 

… However, there has to be a line in the sand as the sector is barely advancing, management teams are spending money like they’re drinking water and whose money is it – investors and that “well “can run DRY!

 

 

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

 

 

If you are not a subscriber, you won’t know the morning’s indications and who is in the headlights.

 

I write in every line that investors need to avoid risks as if I were the first to be hurt if I am wrong!

 

 

 

RegMed Investors’ (RMi) provides exclusive and original content; put your eyes on the page to figure out what’s really going on!

 

 

BUY: AGTC

SELL: BSTG

 

Indexes and ETFs: The IBB (+0.17%) is UP and the IWM (-0.14%) is DOWN  while the XLV and XBI are NOT indicating

Dow futures are DOWN -0.14% and NASDAQ futures are DOWN -0.11%

 

U.S. stock index futures pointed to a lower open on Friday morning as traders eyed October's jobs report and geared up for next week's presidential election, where some polls appear to show the race between Hillary Clinton and Donald Trump tightening as campaigning enters its final days.

European stocks extended losses in morning trade, following declines overnight on Wall Street as the closeness of the U.S. elections continues to rattle nerves in the market.

Asia markets were broadly lower, with Japanese shares leading losses and the Australian benchmark index slipping to a four-month low, as investors flocked to safe-haven assets amid worries about the U.S. election.

 

Data docket: Nonfarm payrolls, the unemployment rate and average earnings are due at 8:30 a.m. ET, with trade deficit data also due at 8:30 a.m. ET.

 

 

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

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

·         Thursday closed NEGATIVE with 37 decliners, 5 advancers and 1 flat;

·         Wednesday closed NEGATIVE with 36 decliners, 6 advancers and 1 flat;

·         Tuesday closed POSITIVE with 14 decliners, 26 advances and 3 flats;

·         Monday closed NEGATIVE with 32 decliners, 11 advancers and 0 flat;

·         Last Friday closed NEGATIVE with 22 decliners, 16 advancers and 5 flats;

 

 

Remembering Thursday’s closing post, “Thursday’s gains of 5 declined from Wednesday’s 6 as compared to Tuesday’s 26 gains versus Monday’s 11 compared to Friday’s 16 gains related to last Thursday’s 10 gains … While Thursday’s 37 decliners increased from Wednesday’s 36 decliners compared to Tuesday’s 14 versus Monday’s 32 compared to Friday’s 22 gains relates to last Thursday’s 30 number defining further weakness.”

  • The stem, cell, gene and regenerative therapy (SCG&RT) sector has gone from poor (in more than a word) to pitiable since the first of the year- FY16.

If you’ve invested in the SCG&RT sector, you want to see P1/2 trials enrolling, IRBs prevailing and  positive results of P2 advancing to P3s. That’s what these companies are supposed to be doing — enhancing development while keeping expenses in check — in a disease state or an indication with regulatory prospects.

  • Which should set-up the potential of a return to a pricing upside and appreciation after huge slides once we get through this abyss of negative investor sentiment or worsening conviction?

However, we’re barely advancing, management teams are spending money like they’re drinking water and whose money is it – investors and thay could very well be running DRY!

 

 

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 down -2.93% and is UP +0.17% in Friday’s pre-market;

·         The SPDR S&P Biotech ETF (XBI) closed Thursday down -3.81% and is NOT indicating in Friday pre-market;

·         The Health Care Select Sector SPDR ETF (XLV) closed down -0.95% Thursday and UP +0.05%  in Friday’s pre-market;

·         The iShares Russell 2000 (IWM) closed down -0.48% on Thursday and is DOWN -0.14% in Friday’s pre-market.

 

 

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed DOWN another -$0.20 to $6.35 after Wednesday’s $6.55 (-$0.30) following Tuesday’s $6.85 (-$0.30).  What has changed?  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.  Book value per share is $9.87 and there is NO need for a capital markets offering; with a float of 9.88 M shares with 52.30% held by institutions and 18.05 M outstanding with 51.15% held by insiders are positives. A slow-down in trial recruitment isn’t worth this depreciation, compared to others – sticking to my research - OVERSOLD – Maintaining BUY;

Biostage (BSTG) closed DOWN -$0.04 to $0.746 following Wednesday’s to $0.788 (-$0.09). Quarterly reporting is slated for 11/10 – what will it say – spending continues without any regulatory advances? The depreciating share pricing ($0.74) is inhibiting their capacity and ability to finance to the future on reasonable terms and with a reputable banking team. I believe this impairment after a $1.95 financing, a $1.76 offering is  ddefined by dependence on day trading. I keep hearing, feedback from analysts, bankers and investors is more than inhibiting to the future. Where is the BOD, after the last financing, members of the BOD bought UNDER the offering price of a closing financing – this optics should reinforce their out-of-touch attitude and optics speak louder than words.  The real issue is still, BSTG is a pre-clinical model in a public shell.    Access to capital markets will be the key and at what pricing - $0.50? BSTG has forgotten its base and foundation – investors who needed to believe in its ability to … follow through – Maintaining 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.