July 10, 2017 8:11am

 

Watch the patterns as futures “inch” higher

The question is the same, what’s actionable?

 

Expectation, more of the same …

 

A critical indication ahead of “our” universe’s open!

Pre-open indication: seven (7) with  2 BUYs and 5 SELLs

 

Are you a subscriber?  If not – you’re missing the realities of “our” universe! 

 

 

 

I know what a company is supposed to look like, be like, and smell like to succeed!

 

 

Higher open expected

Dow futures are DOWN at -0.07% and NASDAQ futures are UP +0.22%

 

U.S. stock futures on Monday largely pointed to a small rise at the open, putting the main benchmarks on track to add to last week’s modest advance as traders awaited the release of economic data and eyed earnings.

Europe markets were higher on Monday morning, extending gains

Asian indexes closed in positive territory on Monday after U.S. jobs data beat forecasts and as Chinese inflation data for June were in line with expectations.

 

Data docket: consumer credit data for May released at around 3 p.m. ET.

 

 

The cell therapy sector closed POSITIVE on Friday, NEGATIVE on Thursday, POSITIVE on Wednesday; Tuesday was a holiday and POSITIVE on last Monday.

The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):

·         Friday closed POSITIVE with 13 decliners, 28 advancers and 2 flats;

·         Thursday closed NEGATIVE with 30 decliners, 10 advancers and 3 flats;

·         Wednesday closed barely POSITIVE with 19 decliners, 20 advancers and 4 flats;

·         Tuesday the market was closed;

·         Last Monday closed POSITIVE with 11 decliners, 30 advancers and 2 flats;

 

 

Last week I was off … as I saw the lows were low and the highs peaked quickly … thanks to volume,

What did I try not to see on Friday <a vacation that never took hold as a therapy overwhelmed the body>; closely correlated benchmarks or fundamentals haven’t been seeing eye to eye, lately.

 

On Friday, markets finished higher for the session and week on the back of a rebound in tech stocks with the Dow (+0.44%) rising 0.3% for the week, the S&P 500 index SPX, rising (+0.64%) less than 0.1% for the week and the Nasdaq (+1.04%)  advancing 0.2% for the week

  • But in recent trade, the equity indicators have seen the lowest level of correlation since 2003, <according to data from WSJ Market Data Group> tracking a 20-day rolling average of the benchmarks over the past 15 years.

Some of the cell therapy sector’s usual suspects participated  in the recent flip-flops, which began in earnest around June  after many of the biggest names in the sector touched recent highs and then downsized, including bluebird bio (BLUE) -$1.00 or -0.99%%, Sangamo (SGMO) -$0.05 or -0.56%, Juno Therapeutics (JUNO) -$0.50 or -1.69% while Kite Pharma (KITE) rode the wave +$2.07 or +2% and Verastem (VSTM) +$0.17 or +4.93%.

  • The holiday week has adjusted the cell therapy sector with the seesaw feeling the weight of the seesaw.

With Friday’s gains in the cell therapy sector, investors need to see some follow through, after a momentary bounce back from short covering or bargain hunting.

The question is … will Friday’s rebound carry into this week?

I see issues with … the month and quarter ending and spending and development exposures are soon to become evident!

 

 

The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market … traded on:

  • Friday (7/7), near 11.19 – down -1.35 or -10.77%
  • Thursday (7/6), near 12.54 – up +1.47% or +13.28%
  • Wednesday (7/5), near 11.07 – down -0.01 or -0.09%
  • Tuesday (7/4 … holiday
  • Monday (7/3) near 11.02

 

 

The iShares Nasdaq Biotechnology ETF (IBB) for the week showed:

  • Friday, up +2.01 at 312.46
  • Thursday down to 310.45
  • Wednesday up to 315.29
  • Tuesday - holiday
  • Monday at 310.95

 

 

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 up +2.01% on Friday, and did NOT indicate in Monday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) closed Friday up +0.38%, and is NOT indicating In Monday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) closed up +0.51% Friday, and is indicating a POSITIVE +0.35%  in Monday’s pre-open;
  • The iShares Russell 2000 (IWM) closed up +0.97% on Friday, and is indicating a NEGATIVE -0.11% in Monday’s pre-open

 

 

Companies in my headlights:

Aduro Biotech (ADRO) closed up +$0.50 to $13.00 on some big volume – 502,917 shares <3 month average = 451.7 K>. July started at $11.05, June started at $9.90, May at $9.70, April at $9.80, March at $11.25, February at $11.90 and January at $11.30. There is a 15% premium in the pot since 7/3. Are you here for profit and want to ride a horse in a fixed race? Even though there is as of the end of Q1, $353.96 M in cash or $5.06 total cash per share –the sector is too short-term oriented.  I’d take it to the window and set-up for the next race – SELL;

BioLife Solutions (BLFS) closed up +$0.04 to $2.89, the highest in a year to date. BLFS reached an agreement with WAVI Holding AG, its debt holder and largest shareholder, to modify its existing credit facility effective 6/30/17. The preferred shares being issued to WAVI are not convertible into any other form of equity and can only be redeemed at the stated value of $4.25 M at times and in amounts solely determined by the company.  The preferred shares also carry an annual cash dividend of 10% of the outstanding stated value, calculated and payable in arrears on a quarterly basis. This modification will ensure that we continue to meet NASDAQ's minimum shareholder equity requirement of $2.5 million without any dilution to our common shareholders. July started at $2.62, June at $2.15, May at $2.02, April at $2.10, March at $1.98, February at $1.83 and January at $1.62 … I may be early but, be ready for an OFFERING  --- SELL;

Biostage (BSTG) closed up +$0.017 to $0.4278. How does a continuous stream of dilution and share price depreciation further … incense holding shareholders?  An offering priced at $0.315 to raise 3.1 M is just a continued insult . Also define expectation of losing ANY right as a shareholder. This was the same deal that was on the table around Thanksgiving at $0.875, if the opportunity arises ask the CMO now president – his role in the endeavor? I still believe the SEC will have MANY an issue with shareholder rights being “played with”.  Also the status of the company as an on-going” concern remains in jeopardy over tax issues of the spin-out from HBIO, the lawsuit brought concerning a terminal death where HART nor BSTG rendered to Dr. Paolo Macchiarini. Also, is there more to the story of executive, male and female employees leaving the company? JUST TOO MANY ISSUES as the CEO and the BOD play “ostrich”- the common name for a very large, fast-running, flightless, ratite bird that CAN’T fly - SELL;

Cellectis SA (CLLS) closed down -$0.09 to $25.44. Cellectis S.A. (ALCLS.PA) (CLLS) and Calyxt announced today that Calyxt has commenced a proposed initial public offering of 6,060,606 shares to raise $100 M of Calyxt’s common stock pursuant to a registration statement on Form S-1 with the U.S. SEC. In connection with the offering, Calyxt intends to grant the underwriters an option to purchase up to 909,091 additional shares of common stock to cover over-allotments. The estimated price range for the initial public offering is $15.00 to $18.00 per share of common stock, which would result in gross proceeds of $100.0 million at the midpoint of the estimated price range. Calyxt has applied to list its common stock on the NASDAQ under the ticker symbol “CLXT.”Calyxt is Cellectis’ 100% owned gene editing agriculture company. Cellectis intends to retain majority ownership of Calyxt.The after market indication is a negative -$0.08 or -0.31%. CLLS will be a BUY as the cash infusion of a subsidiary will reflect better on the balance shhet than the drain of cash of a su - BUY

Neuralstem (CUR) closed up +$0.33 to $5.91. A good week plus as CUR was added to the NASDAQ Microcap® Index as part of the FTSE’s annual reconstitution of its family of U.S. indexes on June 26th. The shares have run – hot and cold, June started at $5.21, May at $4.80, April at $5.14 and March at $4.57 with a four (4) month low of $2.93. FIVE (5) ETFs have exposure … I would lighten the load even if it jumps as CUR completed dosing of the last subject. Risk has its reward; I’d take the safer route – SELL;

Pluristem (PSTI) closed down -$0.0035 to $1.26. Austria’s regulatory health agency, the Austrian Agency for Health and Food Safety (AGES), has cleared PSTI to begin enrollment in Austria for its pivotal P3 trial of PLX-PAD cells to treat Critical Limb Ischemia (CLI). The trial is currently enrolling patients in the U.S., U.K., and Germany. The pre-market indication is a POSITIVE +$0.02 or +1.59% - BUY;

Verastem (VSTM) closed up +$0.17 to $3.62 after a push by Raymond James. VSTM was a big mover, as the company saw its shares jump almost 42% on the day. The move came on solid volume with far more shares changing hands than in a normal session. This continues the recent uptrend for the company as the stock is now up over 62% in the past one-month time frame. However, July started at $2.10, June started at $2.18, May at $2.16, April at $2.04, March at $1.15, February at $1.28 and January at $1.15 -- what about all those investors who HAD hung on and were unhappy for many months.  I’d WALK with the upside as time to results publication is always to the downside and … another company that could run to the offering window with a recent win/run-up. It’s always the matter to have cash, forthcoming results to open the offering capacity – SELL;

 

 

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.