November 11, 2016 6:35am
… My contrarian “artery” is hemorrhaging
As quarterly reporting was over-looked, some say luckily, pre-occupied by election outcomes –
… Cash positions are diminishing and those who need capital market access are going to find investors tougher without strengthening fundamentals
Remember those who have served – Veteran’s Day!
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!
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SELL: ADRO, BLCM, BLFS, BLUE, BSTG, CAPR, JUNO, KITE, ONCE and RGNX
Indexes and ETFs: The IBB (-1.37%) and XBI (-1.20%) are DOWN, the IWM (+0.15%) is UP while the XLV is NOT indicating
Dow futures are DOWN -0.22% and NASDAQ futures are DOWN -0.69%
U.S. stock index futures indicated a slightly lower open on Friday morning as traders continued to digest the presidential election result and eyed comments from Federal Reserve Vice Chairman Stanley Fischer.
European markets were lower as investors paused for breath following the victory for Donald Trump which has spurred on risk assets across the globe.
Asian markets hesitated while stocks in Shanghai entered a bull market as the rally in the dollar following Donald Trump's win in the U.S. presidential election dampened demand for emerging market assets.
Data docket: consumer sentiment released at 10:00 a.m. ET, while Fischer is due to speak at 8:30 a.m. ET on U.S. monetary policy and the global economy.
The stem, cell, gene and regenerative therapy (SCG&RT) sector closed POSITIVE on Thursday and Wednesday, NEGATIVE on Tuesday, POSITIVE on Monday and last Friday.
The SCG&RT sector’s record after the last 5 days (of 43 covered companies):
· Thursday closed POSITIVE with 11 decliners, 30 advancers and 2 flats;
· Wednesday closed POSITIVE with 8 decliners, 34 advancers and 1 flat;
· Tuesday closed NEGATIVE with 24 decliners, 18 advancers and 1 flat;
· Monday closed POSITIVE with 13 decliners, 25 advancers and 5 flat;
· Last Friday closed POSITIVE on Friday with 8 decliners, 31 advancers and 4 flats;
Remembering Thursday’s closing post, “Volatility after a surprise event usually causes a sells off. Investors should note that early reactions are very short-term and rarely correlate to near-term sector performance. “
- “Prior to the election results, my view was, and it continues to be, that “our” universe will face several headwinds and challenges in ending the year FY16 and beginning 2017 to mid-year.”
Reiterating, many of my readers made money yesterday, especially toward the end of the session as strength is to be sold into. Trying to guess "when" to SELL is futile. Being prepared to act when it is called for is appropriate … even IF it is a bit early.
- Did I leave money on the table – I did, but, incremental returns are UP and I have many who are happy with the trades!
I believe OVERBOUGHT indications should be flashing a warning.
Investors should focus on valuation, strength of cash positions, margin of per-share-earnings in relation to the previous quarters (Q2, Q2 and Q3/15) and capital raise prospects.
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 +1.68% and is DOWN -1.37% in Friday’s pre-market;
· The SPDR S&P Biotech ETF (XBI) closed Thursday up +3.15% and is DOWN 1.20% in Friday pre-market;
· The Health Care Select Sector SPDR ETF (XLV) closed up +1.10% Thursday and is NOT indicating in Friday’s pre-market;
· The iShares Russell 2000 (IWM) closed up +1.60% on Thursday and is UP +0.15% in Friday’s pre-market.
Companies in my headlights:
Aduro Biotech (ADRO) closed UP +$0.30 to $14.70 after Wednesday’s $14.40 (+$1.85). The previous four day range was $9.95 to $12.55. ADRO’s pre-clinical data showed that pLADD induced a robust immune response, including broad innate immune responses involving cytokines, chemokines, natural killer, and gamma delta T cells, as well as antigen-specific adaptive T cell responses (CD8+ and CD4+). Personalized therapies are the next new wave in immunotherapy which customizes individual treatment for each patient based on neoantigens that are unique to a patient’s tumor. Take some “$” off the plate, shooting stars run-out of gas – Maintaining SELL;
Bellicum Pharma (BLCM) closed UP +$1.21 to $20.49 after Wednesday’s $19.28 (+$1.55). The previous four days ranged from $16.31 to $17.75. Traders have not been making any money in this sector, so it might be time to fill an investor’s wallet – Maintaining SELL;
Biostage (BSTG) closed DOWN -$0.02 to $0.85 after Wednesday’s $0.87 (+$0.04). FDA issues impact timelines and delays any human trial by six to possibly nine months. The real issue is still, BSTG is an early pre-clinical model in a public shell. BSTG needs to raise cash when and if the financing window opens which will be crowded by more advanced trial companies. BSTG is dependent on the low end retail market which is driven by day traders and less on solid support. Investor communication is only relegated to quarterly reporting – too bad - Maintaining SELL;
BioLife Solutions (BLFS) closed UP +$0.10 to $1.59. Quarterly reporting indicated an increase in revenue and a decrease in the net loss and a -$0.01 per share however, their cash position is shrinking ($1.369 M); their accounts receivables are up along with inventory levels. I also question how many new customers can be added as it’s their current claim to fame. Gross margins are slipping while operating costs are increasing and after all the bluster related to the evo Smart Shipper and biologistex Cold Chain Management SaaS – it is still slow in acceptance. BLFS might be a tight operation but, there doesn’t seem to be ANY room for unanticipated issues or delays – SELL;
bluebird bio (BLUE) closed UP +$2.15 to $54.75 following Wednesday’s $52.60 (+$6.50). The previous four days have ranged $41.30 to $46.10. After all the burn and churn of the stock, any “serious” upside is suspect and subject to selling – Maintaining SELL;
Capricor (CAPR) closed DOWN -0.03% at $2.79. CAPR reported a loss of $5.3 M or -$0.29 per share in Q3. A year ago, they were trading at $4.18 – how the Beverly Hills have fallen. An issue, CAPR is consistently raising money – twice in the past 6 months which needs to continue but, at what cost to current investors? An NIH grant ($4.2 M) and DOD grant ($2.4 M) help but, the question still remains – will Janssen (J&J) step-up on its option – a wild card. Cash position of $20.5 M is good however, spending is ramping upward. I have yet to see or hear about exosomes patent filings if their focus “in other therapeutic areas” is to be successful – SELL;
Juno Therapeutics (JUNO) closed UP +$1.73 to $30.14 following Wednesday’s $28.41 (+$3.12). The aftermarket indication is positive +$0.59. I’d be a trader on new high and Friday ends the week – never be too long – Maintaining SELL;
Kite Pharma (KITE) closed UP +$1.29 to $50.90 following Wednesday’s $49.61 (+$4.04). The previous four days have ranged from $40.21 to $45.69 on some serious volume. Every time pricing gets “heady” they suffer from trading – Maintaining SELL;
Regenxbio (RGNX) closed UP +$2.55 to $22.30 following Wednesday’s $19.75 (+$1.85). After the previous six days of ups that ranged from $15.65 to $17.90 – the chart seems to be “peaking” with a target on its back. After a surge, there is always a purge – Maintaining SELL;
Spark Therapeutics (ONCE) closed UP +$2.67 to $55.17 following Wednesday’s $52.50 (+$4.99). The share pricing is surging after four days that ranged from $40.51 to $47.51. Time to put the horse in the paddock for a rest – 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.
