RegMed Investors’ (RMi) closing bell analysis, feel the highs now but, the post-election hangover will be a bummer

November 8, 2016 5:24pm

… Sector stocks erased an opening loss to trade higher as voters head to the polls in the presidential election.

We are still in quarterly earnings season …

Out and about: Osiris (OSIR) – investors gets a preview of the K and Q filings

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

Lose an advantage or be a subscriber!  Today’s results have implications to Wednesday's sector activity.  

There are two things that investors need - interpretation of news and translation of market metrics concerning the stem, cell, gene and regenerative therapy sector to substantiate share pricing.

I say today what others won't, so you can do what others can't whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.

U.S. equities closed higher on Tuesday, as investors awaited the results of the U.S. presidential election.

The NASDAQ closed UP +27.32 or +0.53% to 5,193.49 and the DOW closed UP +72.69 or +0.40% to 18,332.29.  

A day in the life of the stem, cell, gene and regenerative therapy (SCGT & RT) sector – the advance/decline line scenario of our 43 covered companies:   

• The open was negative with an A/DL of 12/26 and 5 flat – the opposite of yesterday;
• The mid-day jumped positive with an A/DL of 22/20 and 1 flat;
• The closing bell was negative with A/DL of 18/24 and 1 flat;

Henry’omics:

The stem, cell, gene and regenerative therapy (SCGT&RT) sector opened negative, jumped barely positive at the mid-day and closed negative.

• From this morning’s shareholder letter, “it’s almost over… No matter who wins <the election>, investors are screwed …!”

Reiterating, “as unpredictable as this election run has been; stocks have been fairly predictable after the election - tending to sell off.”

• The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market, traded 1% lower, near 18.5, after briefly trading higher.

The iShares Russell 2000 (IWM) indicated a negative pre- open of -0.18% and closed UP +0.26% while the iShares Nasdaq Biotechnology (IBB) indicate a pre-open positive of +3.69% and closed UP +0.17%.

These daily downside swings show just how “soft” pricing was and is last and this week to date.  Look close at today and the past days – trading ranges:

The downside trend reflects a pricing trend range of:

• Tuesday’s decliners ranged from -0.02% <OPXA> to -5.63% <KOOL> in 23 equities;
• Monday’s decline ranged from -0.08% to -14.94% in 13 equities;
• Friday’s decline ranged from -0.53% to -6.40% in 8 equities;
• Thursday’s decline ranged from -0.24% to -13.74% in 37 equities;
• Wednesday’s decline ranged from -0.01% to -20.41% in 36 equities;
• Last Tuesday’s decline ranged from -0.31% to -8.40% in 14 equities;

The upside shows a pricing trend range of:

• Tuesday’s advancers ranged from +0.35% <ONVO> to +23.63% <OSIR> in 18 equities;
• Monday’s advancers ranged from +1.03% to +10.41% in 25 equities;
• Friday’s advances ranged from +0.01% to +11.06% in 31 equities;
• Thursday’s advances ranged from +1.62% to +4.66% in 5 equities;
• Wednesday’s advances ranged from +0.24% to +7.03% in 6 equities;
• Last Tuesday’s advances ranged from +0.16% to +9.24% in 26 equities;

Wrap-up: anybody can read a paragraph … review the percentage changes per day in the week of the decliners and advancers. The shifting correlation of the number of equites inclining versus the decliners hasn’t abated!

Tuesday’s 18 gainers compared to Monday ‘s 25 compared to Friday’s 31 from Thursday’s gains of 5 declined from Wednesday’s 6 as compared to last Tuesday’s 26 …

While Tuesday’s 24 decliners compared to Monday’s 13 compared to Friday’s decliners to 8 compared to Thursday’s 37 barely increased from Wednesday’s 36 decliners after last Tuesday’s 14...

Out and about:

Osiris Therapeutics (OSIR) offered first glimpse into its books since last year …

• OSIR stock soared 27.45% on Tuesday after it gave the first glimpse into its balance sheet since last year.

OSIR has not filed a financial report since last November, when it reported a $685 K loss in Q3/15. Osiris began reviewing its 2014 and 2015 financial statements after its auditor resigned last December. The statements became the subject of federal investigations. At issue are the firm's internal controls over financial reporting and the timing of revenue recognition for certain contracts.

Osiris said in a federal filing late Monday it has almost completed the restatement of its 2014 financial statements. Once that process is complete, it will begin work on the 2015 financial statements.

• According to the filing, Osiris (NASDAQ: OSIR) estimates its revenue for 2014 was $46 to $50 M, less than its previously reported revenue of $58.8 M. It estimates $85 M to $90 M for 2015 and expects to report 2016 revenue of $100 M to $110 M, which would reflect growth of 100% or more over the last two years.

The estimates caused Osiris' stock price to skyrocket almost 22%, and closed at $4.19 per share on Monday. Osiris’ stock traded Tuesday - in a range of $4.43 to $5.47 and closed at $5.18 or +$0.99.

The stem cell company's failure to meet reporting deadlines has put its stock in jeopardy of getting delisted by the Nasdaq Stock Exchange. OSIR requested a hearing before a NASDAQ hearings panel on 9/21, and said it expected a hearing to be scheduled within 30-45 days.

• Osiris declined to comment and NASDAQ could not be reached.  OSIR has plummeted almost 52% this year as the company has hired … 2 new CEOs.

The federal government has also been investigating the company. In March, Osiris received a subpoena from the SEC and in May the company said the U.S. Attorney’s Office for the Southern District of New York is conducting a criminal investigation into the company's accounting practices <Henry McCusker, RMi and Holden Wilen, Baltimore Business Journal>

Percentage decliners:

• Cesca Therapeutics (KOOL) -5.63%;
• Fibrocell (FCSC) -4.76% after Monday’s -5.96%;
• Vericel (VCEL) -4.55%;
• Pluristem (PSTI) -4.43%
• Sangamo (SGMO) -4.29%

Percentage advancers:

• Osiris (OSIR) +23.63%;
• Histogenics (HSGX) +9.96%;
• Fate Therapeutics (FATE) +9.64%;
• Caladrius Biosciences (CLBS) +9.30%;
• ImmunoCellular (NYSEMKT: IMUC) +9.18% or +$0.0079;

Flat:                                                                                                      

• ReNeuron (RENE.L) at $2.375;
• Verastem (VSTM) at $1.13;

Review my fear gauge or the CBOE Volatility Index (VIX):

·         Tuesday traded near 18.5;

·         Monday traded near 18.6

·         Friday traded near 22.5;

·         Thursday traded near 22.47;

·         Wednesday traded near 19.4;

·         Last Tuesday traded near 19.8 – 10% higher;

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.