“Oil Interrupted” Vista Partners Daily Market Recap 9/16/19

By John Heerdink LinkedIn

The broad markets finished down today all except for the Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index,  moved up by .41% or 6.46 points closing at 1,584.60. The downward pressure on the balance of the markets looked to be squarely in reaction to the weekend’s news that the world’s oil supply had been interrupted by a drone attack in Saudia Arabia which knocked out ~5.7M barrels/day of production. In reaction and to stem the fears across the world, on Sunday President Trump had authorized a release of crude oil from the US’s Strategic Petroleum Reserve (SPR) and Saudi Arabia reported that it expected to restore about a third of the lost production on Monday, but further speculated that it might take weeks to get the production back to normal. This sent oil prices flying along with threats and speculation of retaliatory reactions to those that controlled the drone attack which has been suggested it could be Yemen, Iran, etc. Oil rose today and closed at  $62.88/bbl up a sizable 14.6%.  Chevron (CVX) moved higher up by 2.16% closing at $124.12/share & Exxon (XOM) closed higher up by 1.50% closing at $73.73/share.  Occidental Petroleum (OXY) closed at $47.80/share up by 6.01%. The ETFcalled  Direxion Daily S&P Oil & Gas Exp & Production (GUSH) jumped an amazing $31.83%.

As for the balance of the indexes the Dow today proceeded to lose 142.70 points closing at 27,076.82 down .52%. The tech-heavy Nasdaq closed at 8,153.54 down .28% or 23.17 points. The S&P 500 also lost 9.43 points or .31% to end the session still below the 3k level again at 2,007.96.

There was overall a flight to safety as the S&P 500 sectors of energy, real estate, & utilities were up 3.3% 1% & .1% respectively. Treasury yields also continued its recent move higher again today. The 2-yr Treasury yield closed at 1.76% down .03 & the 10-yr yield finished higher at 1.84% down .06. The U.S. Dollar Index closed at 98.61 up .4% on the day. Gold prices moved higher today & closed at $1500.82/oz. Silver closed at $17.92/oz. Hecla Mining Company (HL) closed at $1.96/share up 8.29%. First Majestic Silver (AG) closed higher at $9.67/share up 3.87%.

Volatility 

Volatility bets jump back into gear with the fear today.   The CBOE Volatility Index (VIX) closed at $14.67/share up 6.77% or $.93/share. The 2x leveraged ETF TVIX  closed at $13.52/share up 2.42% or $.32/share and traded tightly between $13.16 and $13.87 today.

Healthcare

The S&P 500 healthcare sector closed at 1053.26 down .23%. UnitedHealth (UNH) closed up .35% closing at $234.431/share, Walgreens Boots Alliance (WBA) closed at $55.34/share down 1.16% & Cigna (CI) gained 2.89% closing at $165.50/share.

INVO Bioscience, Inc. (IVOB) ended the day at $.2745/share. Daily trading volume continues to rise in concert with their announcing progress after their exclusive U.S. partnership with Ferring Pharmaceuticals, a leader in the reproductive health industry was announced in Q1-2019. Ferring has committed to providing the necessary sales and marketing resources to more fully develop the market in the United States. There are countless couples not able to receive reproductive treatments today, and Ferring can be instrumental in addressing the unmet needs of this cohort. Ferring has the industry experience, relationships and the marketing capabilities to successfully embed the INVOcell in clinics throughout the country.  IVOB is a medical device company, headquartered in Sarasota, FL focused on creating simplified, lower-cost treatment options for patients diagnosed with infertility. The company’s lead product, the INVOcell, is a novel medical device used in infertility treatment that is FDA cleared and that enables egg fertilization and early embryo development in the woman’s vaginal cavity. 

Recently, INVO Bioscience (IVOB) announced that revenues for the quarter totaled $658,638 compared to $110,210 in the second quarter of 2018, an increase of 498%. Revenue growth was driven primarily by increased product sales in the U.S. as shipments to Ferring were above expectations outlined in May 2019 as they began to increase their marketing activities. On January 14, 2019, the Company closed an exclusive U.S. licensing agreement with Ferring International Center S.A. the parent Company of Ferring Pharmaceuticals U.S. to commercialize the INVOcell™ system for use in the treatment of infertility. As part of the U.S. licensing agreement, the Company received a $5 million one-time milestone payment, with the ability to receive an additional $3 million upon obtaining a label enhancement from the U.S. Food and Drug Administration. Read Complete Story.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) moved higher up .90% to close at $105.14.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $2.01/share down .99% after hitting a high of $2.11 today and a $2.25 week high. The average daily trading volume is 408,562 shares per day and reported Q2 financial results & company update today. Yesterday Atossa announced that all participant activities have been completed in its Phase 1 clinical trial of a new proprietary modified-release oral tablet form of its Endoxifen. This is the next generation of oral Endoxifen following the successful clinical studies of the capsule form of the company’s oral Endoxifen. Steven C. Quay, Ph.D., M.D., CEO, and president of Atossa, commented: “We are very pleased that this study enrolled so quickly, with all 24 participants enrolled and dosed over the past six weeks. This is a very important study for Atossa as we plan to use the new modified-release oral tablet in our upcoming Phase 2 study to reduce breast density. We expect to report preliminary results from the Phase 1 study in the next 30 days and then move forward with the Phase 2 study in the fourth quarter. Ultimately, the goal of the modified-release aspect of the drug is to create more even uptake of the drug which we believe may reduce side effects and improve efficacy.” The Phase 1 study is being conducted in Australia. The objectives of the study are to assess safety and tolerability and to ascertain the pharmacokinetics of the tablet. The study is randomized, double-blinded and placebo-controlled with both single and multiple-doses (daily for 14-days) in two groups with a total of 24 healthy female volunteers. Atossa’s oral Endoxifen capsule served as the comparator.

Atossa presented last week at the Rodman & Renshaw Conference in NYC and published their updated presentation that included their near term milestones on page 23. It includes a milestone regarding their Oral Endoxifen Phase 1 trial where they expect to reveal their “results from Phase 1 study of the new modified-release tablet” this month.

Day or Short Term Trading Update

Our recent buy of Bloom Energy ( BE) at $5.06/share and $4.99/share paid off as it surged to $5.70 about a 14% move. We were seeking a swing back up to at least the high $5’s after its recent beat down and we got it.

We identified San Jose, CA’s Zscaler (ZS), a cloud-based web security provider, as a bounce play after it got slammed earlier this week after being downgraded and closed down at $70.80. ZS popped then to $74.51/share for an approximate 5% gain.

The Hain Celestial Group, a leading organic and natural products company with operations in North America, Europe, Asia & the Middle East,  was also identified as another bounce play. HAIN shares closed trading at $18.36/share Wednesday (Aug. 21st) after a recent analyst downgrade and a simultaneous price drop from the $22 level that seemed to be triggered by fears surrounding The Brexit issue and timeline. Thursday, Aug 22nd, HAIN  shares rose to an intraday high of $18.99 and then closed at $18.91 for 3% move.

On  Aug. 28th The Hain Celestial Group (HAIN) announced the completion of the divestiture of its Tilda to Ebro Foods for $342 million in cash. We reentered HAIN stock at $18.30/share and it moved to an intraday high of $18.66 prior to closing at $18.36/share up .99%. HAIN is due to report Q4 and fiscal year 2019 earnings tomorrow at 8:30 am eastern.  Today HAIN hit an intraday high of $19.69/share and closed at $19.03 up 3.65%. This was another successful exit.

Thursday, Aug. 29th we also entered into Acasti Pharma Inc. (ACST) at $1.81/share for a momentum trade and targeting minimal price target of $2/share and then added additional shares at $1.79. ACST is a biopharmaceutical innovator focused on its prescription drug candidate CaPre for the treatment of severe hypertriglyceridemia (HTG). ACST shares closed today’s trading at $1.99/share up 10.56% after hitting an intraday high of $2.03 on trading volume of 2.04M shares. B. Riley initiated coverage with a BUY Recommendation and a Price Target of $7.75/share earlier this week. We locked in our quick trade at $2/share today for ~11.5% gain. We will look to reenter ACST if we see a significant pullback.

We added more Atossa Genetics (ATOS) today $2.02/share scaling the position that we started at $1.97/share – $2.12/share. Atossa presented at the Rodman & Renshaw Conference in NYC yesterday and used their updated presentation that included their near term milestones on page 23. It includes a milestone regarding their Oral Endoxifen Phase 1 trial where they expect to reveal their “results from the Phase 1 study of the new modified-release tablet” this month. The stock has traditionally moved well around these events and closed today’s trading at $2.3 down 3.33% after hitting $2.18 on 333,115 shares of trading.

We traded Stoke Therapeutics, Inc. (Nasdaq: STOK), a biotechnology company that is pioneering a new way to treat the underlying cause of genetic diseases by precisely upregulating protein expression, overnight as it closed at $28.80 down close to 14% on Tuesday and then bounced in early morning trading to $30.60/share on Wednesday.

Our recent addition of Clearside Biomedical (CLSD) that we initiated a position in at $.67/share which closed at $.8163/share today up 3.33%. However, we feel this may have a bit of room to run again but may look to lock in these gains.

We also added Endurance Interantional Group Holdings, Inc. (EIGI) after it took a 20% plus hit it suffered in the markets today and we could not pinpoint as to why. Our buy today was at $4.50/share. EIGI hit a low of $4.28/share and day high of $5.54/share. The 52-week range is $4.13 – $10.06. Waltham, Mass. based EIGI is the owner of Constant Contact an experienced leader in online marketing.

Economy

On Monday, we received the Empire State Manufacturing Survey for September which showed that it had moved down to 2.0  from August’s reading of 4.8.

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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