September 8, 2017 7:37am
Share pricing premiums are thinning after the KITE, SGMO, NVS and VSTM upsides
… When I put together my model portfolio, I respond to the strength of momentum and then measure for sustainability
My concern is that most share pricing has already been anointed, engendered by acquisition, FDA approvals and trial results but has been limited to the few, the cell and gene therapies are still speculative and slippery
… What’s sticking to these walls … if *you had read last night’s newsletter; you’d be able to define today’s scenario!
Preview RMi's morning call. You’d be reading this if you were a SUBSCRIBER!
Pre-open indications: 2 BUY and 3 SELLs
Critical pre-market indications ahead of “our” universe’s open!
Critical pre-market indications ahead of “our” universe’s open!
Lower open expected
Dow futures are DOWN -0.36% and NASDAQ futures are DOWN -0.26%
U.S. stock index futures pointed to a lower open on Friday, as investors took note of the weaker trading seen overseas, while awaiting more data releases.
European markets were mixed, as investors tracked a massive storm nearing the U.S. while the dollar skidded against the euro after comments from European Central Bank (ECB) President Mario Draghi.
Asia markets closed mostly lower as the dollar posted broad losses a day after the European Central Bank putting tapering on the table on Thursday.
Data docket: wholesale trade is set to come out at 10.00 a.m. ET, followed by consumer credit at 3.00 p.m. ET. Meanwhile in earnings, Kroger is set to report before the bell.
Issues that affect the trading day: The political machinations keep investors wondering about the prospect of key legislative policies, hurricanes and North Korean missile threats.
The cell therapy sector closed POSITIVE on Thursday, NEGATIVE on Wednesday and Tuesday, was closed on Monday, a holiday; having closed POSITIVE last Friday.
The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):
· Thursday closed POSITIVE with 11 decliners, 28 advancers and 4 flats;
· Wednesday closed NEGATIVE with 22 decliners, 18 advancers and 3 flat;
· Tuesday closed NEGATIVE with 27 decliners, 13 advancers and 3 flats;
· Monday was a holiday and the markets were closed in observance of Labor Day;
· Last Friday closed POSITIVE with 14 decliners, 27 advancers and 2 flats;
Henry ’omics:
As I had stated in Thursday evening’s post, “… the daily ride on the sector seesaw as the sector moved to the positive at the mid-day having opened to the downside. There are so many cross-currents, fundamentals that are usually in conflict with share pricing.”
Reiterating, “I have a lot of concern with the abruptness of declines and sharp spikes of inclines. It’s a question of which incline can stay hot as the pendulum of profiteering swings … the problem of the inclines is what is in the basket to keep a stock moving?”
Next week is the Rodman Renshaw conference or as The Daily Mail calls them, “Robmen and Rebshaw” or as I refer to the “the show of the needy, downtrodden and should be avoided or forgotten”.
Stepping out of this circle, the question of the quarter and next: Are we just throwing money like the bath water through an open financing window on some companies?
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 +0.27% on Thursday with Friday’s pre-market NOT indicating;
- The SPDR S&P Biotech ETF (XBI) closed Thursday up +0.11% with Friday NOT indicating;
- The Health Care Select Sector SPDR ETF (XLV) closed up +1.10% on Thursday and is NOT indicating in Friday’s pre-open;
- The iShares Russell 2000 (IWM) closed down -0.25% on Thursday and is indicating a NEGATIVE -0.24% in Friday pre-open
Companies in my headlights:
Athersys (ATHX) closed up +$0.02 to $2.07 with 1.739 M shares traded. Wednesday showed an upside to $2.05 with 3.275 M share trading following Tuesday’s $1,86 with 1.381 M shares traded following last Friday’s $1.75 with 1 M shares traded. Momentum is definitely a factor which has also seen a sustainable factor of pricing for the last twelve (12) sessions and solid volume. It has also seen far more shares changing hands than in a normal session. This continues the recent uptrend for the company as the stock is now up 31.4% in the past one-month time frame The aftermarket indication is a positive +$0.04 or +1.95% - BUY;
bluebird bio (BLUE) closed up + $2.70 to $129.20. It’s been a good three sessions as BLUE advanced, $125.45, and $126.50 to $129.20 considering that on 8/30, the share price was $112.50. The aftermarket indication is a NEGAIVE -$0.20 or -0.15% - SELL;
Histogenics (HSGX) closed up +$0.04 to $1.89 with 53 K shares traded <e month average = 60.75 K shares>. September has seen pricing roll between $1.85 to $1.89 on some moderate to light to back to moderate volume after 8/31’s $1.84 that traded with 172.7 K shares traded. The aftermarket is a POSITIVE +$0.01 or +0.53% - BUY;
Juno Therapeutics (JUNO) closed up +$1.20 to $42.61. The chart looks ready for yet another dip as volume is increasing as the pricing has fluctuated up and down in the last seven sessions ($41.41, $42.68, $41.92, 8/31’s $41.27, $40.29, 8/29’s $43.81 and 8/25’s $30.73. The aftermarket indication is a NEGATIVE -$0.39 or -0.92% - SELL;
Sangamo Therapeutics (SGMO) closed up +$0.60 to $13.60 with 2.37 M shares traded after Wednesday’s $12.95 (-$0.60) with 2.46 M shares traded after Tuesday’s $13.66 (-$0.70) with 3.21 M shares traded < the 3 month average = 1.462 M shares> after Friday’s $14.25 (+$0.90) on solid 5 M shares traded after Thursday’s $13.35 (. +$0.50) with 1.6 M shares traded >. The month has seen lows of $8.40 and last Friday’s high of $14.25 having opened the month at $8.45. The price is resting on the laurels of KITE and NVS and a Pfizer (PFE) collaboration but, why should we pull a trigger to buy if PFE has a strangle hold on anyone else intruding on their deal. The aftermarket indication is a POSITIVE +$0.40 or +2.94% - Maintaining BUY;
Verastem (VSTM) closed up +$0.02 to $4.94 with 3.71 M shares traded after Wednesday’s $4.92 (+$1.08) with 20.8 M shares traded <the 3 month average = 1.29 M shares> after Tuesday’s $3.84 (-$0.08), Friday’s $3.92 (+$0.02), Thursday’s $3.90 (+$0.05) and the previous Wednesday’s $3.85 (+$0.42), Tuesday’s $3.43 (+$0.05) and Monday’s $3.28 (-$0.01). The pre-market indication is a POSITIVE +$0.30 or +6.07% - BUY;
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.
