“Walmart & Uncle Jerry” Vista Partners Daily Market Recap 11/14/19

By John Heerdink LinkedIn

Of major significance to the market and the economy, Dow 30 component and worldwide retailer Walmart (WMT) reported earnings before the market open, beating analyst expectations as earnings were propelled forward on the back of strong online sales. WMT further reported Q3 FY20 GAAP EPS of $1.15 and Adjusted EPS of $1.16, led by strength at Walmart U.S. Walmart also raised expectations for fiscal 2020 EPS. However, shares of Walmart closed trading today at $120.65/share down .27%.

Fed Chair (“Uncle Jerry”) Jerome Powell’s final day of the 2-day testimony on Capitol Hill was basically a repeat of what he had already said when he lowered interest rates for the third time at the end of October so no additional understanding.

As for the markets, today they were slightly down except for The S&P 500 which bumped up again to a new record high. The S&P 500 ended today’s session +2.59 points or +.08% as it closed at 3,096.63. The real estate (+.08%) sector led the way while the energy (-.3%) sector was the largest drag to the downside. The Dow closed off -1.63 points -.01% closing at 27,781.96. The Nasdaq closed at 8479.02 -3.08 points -.04%. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index lost -.39 points -.02% and ended trading at 1,588.79. The U.S. Dollar Index weakened a little ending at 98.17.

The 2-yr Treasury yield closed at 1.58% & the 10-yr yield finished at 1.82% today respectively down 5 and 6 basis points.

Oil prices closed down at $56.76/bbl -.6%. Chevron (CVX) closed at $121.96/share -.26%, Exxon (XOM) closed at $68.50/share -.44%. Chevron reported earnings recently of $.75, beating estimates of $.681 per share. Exxon Mobil (XOM) reported earnings recently of $1.36, missing estimates of $1.564 per share.

Gold prices closed up at $1,472.20/oz. Silver closed at $17/oz +$.05/oz. Hecla Mining Company (HL) closed at $2.40/share -1.23% after reporting its Q3 2019 earnings Thursday Nov. 7th, which highlighted their Adjusted EBITDA of $69.8 million, approximately 40% lower cash cost per silver ounce and all-in sustaining cost (“AISC”) per silver ounce, in each case net of by-product credits compared to the third quarter of 2018, free cash flow of $28.8 million generated and a tentative agreement for their Lucky Friday Mine. (See complete story). BMO upgraded HL last Friday to a market perform. First Majestic Silver (AG) closed higher at $10.76/share +2.48% after reporting their Q3 2019 earnings last week where their CEO Keith Neumeyer highlighted that they added $21.4M to their treasury during the quarter as a result of strong production from San Dimas and Santa Elana mines.

Volatility bets results were up today.  The CBOE Volatility Index (VIX) closed at $13.05/share +.38% or +.05/share. The 2x leveraged ETF (TVIX) closed at $7.83/share 2.37% or +$.19/share and traded tightly between $7.83 and $8.20 today.

Economic Reports

  • On Monday, nothing reported today per the holiday but this was last week’s reports:
  • On Tuesday, the Small Business Optimism Index report for October improved to 102.4.
  • On Wednesday, the Total CPI report showed a rise of .4% month/month in October. Core CPI (excludes food & energy) was up .2%. The YOY changes remain at 1.8% for total CPI and 2.3% for core CPI. The Weekly Mortgage Applications Index report showed a rise of +9.6%. The Treasury Budget Report for October confirmed that the deficit is at $134.5B about a 30% increase YOY.
  • On Thursday, we received The Producer Price Index report which moved up .4% month/month in October. The year/year change are at 1.1% and 1.6%. The Initial claims report confirmed an increase by 14k to 225k while continuing claims for the week ending November 2 dropped by 10k to 1.683M.

Big Movers

Global gaming leader International Game Technology (IGT) reported Q3 results including revenues of $1.15B up 3% at constant currency on significant growth in global gaming product sales. Shares of IGT closed $15.83/share up a whopping 23.49% and leaving them with a $3.2B market cap.

Healthcare

The S&P 500 healthcare sector closed at 1102.38 -.07%. UnitedHealth Group (UNH) closed at $255.83/share +.89% after a recent Q3 earnings beat on 10/15/19 & Walgreens Boots Alliance (WBA) closed at $61.94/share -.50%. Walgreens reported earnings on 10/28/2019 of $1.43/share, missing estimates calling for $1.451 per share, and is reportedly considering a take-private initiative with private equity firms. Yesterday reports surfaced that KKR (KKR $29.80 +1.36%) is preparing a buyout plan. Cigna (CI) closed -.29% closing at $189.70/share.

Worldwide, the fertility treatment market is severely underserved. Currently, only 1% to 2% of the 150 million infertile couples worldwide are treated, with the primary prohibiting factor being cost and access to treatment. INVO Bioscience’s (IVOB) INVOcell system is a novel fertility treatment that uses a woman’s own body as a natural incubator for the incubation of eggs and sperm during fertilization and early embryo development. This cost-effective process has shown comparable pregnancy rates to IVF and in their opinion has the ability to significantly increase patient access. The INVOcell system can eliminate the need for costly infrastructure and overhead associated with IVF, one of the primary hindering factors to fertility treatment in many areas of the continent. Additionally, INVO Bioscience believes the unique in vivo fertilization process is a powerful motivator for many patients and in their opinion the only acceptable option available to some patients for religious and cultural reasons.

Recently, INVO Bioscience, Inc. (IVOB), a medical device company focused on creating alternative treatments for patients diagnosed with infertility and developers of INVOcell®, the world’s only in vivo Intravaginal Culture System (pictured above), announced that it has entered into commercialization agreements in the continent of Africa, covering Nigeria, Uganda, Sudan, and Ethiopia, to distribute the revolutionary INVOcell system. The agreements represent INVO Bioscience’s initial entry into the highly populated infertility markets in Africa. According to research, approximately 31% of Nigerian couples fail to conceive a child after 12 months of unprotected sex—a rate at least as high as in the West. Across the continent, infertility is on the rise. Infertility comes with devastating social, cultural, emotional and economic consequences for young couples in Africa. However, access to assisted reproductive services remains a big challenge as traditional IVF treatment is limited in many areas of Africa. (READ complete story)

The African commercialization agreements seem to further support INVO Bioscience’s planned worldwide expansion of INVOcell and follow the recent agreement with Ferring Pharmaceuticals to distribute INVOcell in the United States.INVO Bioscience has entered into distribution agreements with G-Systems covering Nigeria, and Quality Medicine covering Uganda, Sudan, and Ethiopia. Following standard administrative requirements by each company to begin supplying INVOcell in the country, the Company believes distribution will commence in 2020. Each agreement includes minimum annual purchase requirements. Full terms of the agreement were not disclosed.

This week, INVO Bioscience announced it has entered into commercialization agreements in Eurasia, covering Turkey and Jordan. The agreements represent INVO Bioscience’s expansion into Eurasia, a region with a growing middle-class population, yet experiencing a multi-decade decline in birth rate according to The World Bank. The Eurasian commercialization agreements follow the recent agreement with Ferring Pharmaceuticals to distribute INVOcell in the United States.

Today, INVO Bioscience announced financial results for the third quarter of 2019, ended September 30, 2019. Steve Shum, Chief Executive Officer of INVO Bioscience, commented, “We are excited with the progress being made to drive revenue growth domestically through our U.S. commercialization agreement with Ferring and now in other parts of the world with the recent signing of new commercial distribution agreements for Nigeria, Turkey, Jordan, Uganda, Ethiopia, and Sudan. We believe there is an incredible opportunity to drive the adoption of the INVOcell over the coming years through the creation of commercialization agreements with partners. We will remain diligent to find partners that are incentivized to support the product through minimum purchase requirements or similar arrangements. Our agreement with Ferring for the U.S. and our recent agreements for Africa and Eurasia are great templates to continue working from and we look forward to further agreements announced in the future. Other near-term objectives include the initiation of our follow-on clinical study for the INVOcell device to expand the current label from a 3-day incubation period to a 5-day incubation period. As part of the Ferring agreement, if we achieve 5-day labeling approval from the FDA, we receive an additional $3 million non-dilutive milestone payment. In addition to the milestone payment, the new study will allow us to update our clinical data which we believe will allow us to show improved clinical pregnancy and birth rates and further enhance the value proposition we can provide to the market as an alternative to traditional IVF. Our technology is a simple and more natural solution, with comparable rates of effectiveness to existing options at lower costs, that has been designed to help the millions of couples worldwide that struggle with infertility but are currently unable to receive treatment. We are beginning to put in place the commercialization strategy that can allow for the proliferation of this technology which I believe has the ability to significantly enhance shareholder value.”

To learn more about INVO Bioscience (IVOB) and to track its progress daily, please visit the INVO Bioscience Dedicated Research Page by clicking here.

IVOB closed trading at $.26/share on 914,760 shares of trading volume. The 52-wk range is $.22 – $.63.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) moved -.66% closing at $109.85 & the NYSE Arca Biotech Index (^BTK) closed at 4,580.73 -.37%.

Johnson & Johnson (JNJ) closed at $130.96/share -.24%, Merck & Co (MRK) closed at $84.55/share -.32%, Pfizer (PFE) closed at $36.58/share -.14%. Merck (MRK) reported earnings on 10/29/2019 of $1.51, beating estimates of $1.28 per share. Pfizer (PFE) reported earnings on 10/29/2019 of $.75, beating estimates of $.644 per share.

Atossa Genetics (ATOS) closed trading at $1.42/share. Recently, Atossa and The Dr. Susan Love Research Foundation announced that the Institutional Review Board (IRB) has approved a Phase 2 clinical study of Atossa’s intraductal microcatheter technology for the administration of fulvestrant in patients with early-stage breast cancer or ductal carcinoma in situ (DCIS). Susan Love, M.D., inventor of the technology, will advise Atossa as it conducts the trial. Atossa also entered into a clinical trial agreement with a major research university named in the 8k filing that Atossa filed on 10-14-2019 to conduct their Phase 2 clinical study of Atossa’s intraductal microcatheter technology for the administration of fulvestrant in patients with early-stage breast cancer or ductal carcinoma in situ (DCIS). Atossa Genetics is the owner of issued patents, pending patent applications, and medical device FDA 510(k) premarket notifications related to the treatment of breast conditions, including breast cancer and DCIS.

“We have contracted with a world-class teaching, research, and healthcare organization based in the United States to conduct this study,” commented Steven C. Quay, Ph.D., M.D., CEO and President of Atossa. “Atossa’s intraductal technology was invented by Dr. Love and subsequently acquired by Atossa. We are honored that Dr. Love has agreed to work with us on this important new study. This work begins as Atossa increases its corporate focus on its proprietary Endoxifen for the reduction of mammographic breast density.” READ the complete story here.

Yesterday, Atossa announced financial results for the third quarter ended September 30, 2019, and provides an update on recent company developments. Steven C. Quay, M.D., Ph.D., Atossa Genetics’ President, and CEO commented, “In the third quarter we made substantial headway in advancing the development of our lead drug candidate – Endoxifen – as we turn our concentration towards treating mammographic breast density (MBD). We recently announced meeting all objectives in our Phase 1 study of the modified-release tablet form of oral Endoxifen, which paves the way toward advancing our modified-release tablet into Phase 2 studies. The final analysis of the results demonstrated that the modified-release tablet had no treatment-related side effects that were rated as moderate or severe in intensity, strongly supporting the continued development of this proprietary formulation. We also initiated our Phase 2 clinical study of Atossa’s intraductal technology for the administration of fulvestrant in patients with early-stage breast cancer with a major institution and supported by the Dr. Susan Love Research Foundation. Many of the approximately 64,000 women with ductal carcinoma in situ (DCIS) who opt for ‘watchful waiting’ rather than extensive surgery could benefit from a gentler, intermediate treatment of DCIS with intraductal ablation with fulverstrant. Before the end of the year, we look forward to reporting several significant milestones: contracting with a clinical research organization for our Phase 2 study of oral Endoxifen to treat MBD, completing additional pre-clinical work of our cell-based therapy candidate and our intraductal technology, as well as reporting additional results from our recently completed clinical study of our modified-release form of Endoxifen tablets.”

Tech & Entertainment

Apple (AAPL) closed at $262,64/share -.69% as optimism continues to grow with regard to the new iPhone models and new streaming entertainment offering, Alphabet (GOOG) closed at $1311.46/share +1.04%, Facebook (FB) closed at $193.15/share -.02%, Microsoft (MSFT) closed at $148.06/share +.51%, NVIDIA (NVDA) closed at $209.79/share +.58% and reported Q3 results post the close beating Wall Street’s expectations. Bank of America/Merrill Lynch recently raised its NVDA price target to $250 from $225. IBM closed at $134/share -.36% as it recently missed wall street Q3 expectations. Cisco Systems (CSCO) was down -7.33% finishing at $44.91/share after reporting results that missed expectations and lowering guidance. Goldman Sachs (GS) ($219.43/share +.05%) recently downgraded CSCO as it views that corporate spending on technology has weakened.

Disney (DIS) closed at $147.15/share -1.06% after beating quarterly expectations yesterday & announcing that they already have more than 10 million Disney+ subscribers which also beat analysts’ expectations of 8 million subscribers by the end of 2019.

Verizon (VZ) ($59.34/share, -.12%) recently announced that it will be giving the streaming service Disney+ to all new customers of Verizon for a year, and Netflix (NFLX) closed at $283.11/share -3.05%. Amazon (AMZN) closed at $1,753.11/share -1.40%.

Streaming device maker Roku (ROKU) closed at $148.70/share +4.45% after they recently reported earnings beating both top and bottom Wall Street expectations but also reducing its profitability outlook for 2019 as a whole, adjusting it from $30M from $35M reflecting continued investing in the business and Q4 dataxu operations and acquisition expenses. The dataxu acquisition was announced to have been completed today.

Boeing (BA) closed at $367.44/share +1.36% after their CEO’s recent testimony to the Senate and today’s new reported understanding that the 737 Max return is closer than thought.



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