Economy:
The non-seasonally adjusted CPI rose 2.9% over the twelve month period ending in July. At that rate, wage growth is being entirely wiped out by inflation. Core CPI was up 2.4%.
The non-seasonally adjusted CPI rose 2.9% over the twelve month period ending in July. At that rate, wage growth is being entirely wiped out by inflation. Core CPI was up 2.4%.
Consumer Price Index Summary
Core inflation in July was the hottest of the cycle, CPI shows - MarketWatch
Core inflation in July was the hottest of the cycle, CPI shows - MarketWatch
White House not ruling out slapping auto tariffs on Canada
U.S. finalizes next China tariff list targeting $16 billion in imports | Reuters (This was part of the $50B in tariffs that was delayed pending public comments. The new tariffs will commence on 8/23/18. China will respond with tariffs on $16B of U.S. exports: China to slap additional tariffs on $16 billion worth of U.S. goods | Reuters).
Chinese state media accuse U.S. of 'mobster mentality', vow to fight tariffs | Reuters
Chinese tariffs on US gas exports may shift the global market
Apple could be used as a 'bargaining chip' in China-US trade war: CNBC
U.S. finalizes next China tariff list targeting $16 billion in imports | Reuters (This was part of the $50B in tariffs that was delayed pending public comments. The new tariffs will commence on 8/23/18. China will respond with tariffs on $16B of U.S. exports: China to slap additional tariffs on $16 billion worth of U.S. goods | Reuters).
Chinese state media accuse U.S. of 'mobster mentality', vow to fight tariffs | Reuters
Chinese tariffs on US gas exports may shift the global market
Apple could be used as a 'bargaining chip' in China-US trade war: CNBC
South Carolina manufacturer says it's closing plant over Trump tariffs | TheHill
Home prices rise at the fastest pace in more than four years, defying expectations of a pullback - MarketWatch-Housing market has hit a ‘significant slowdown’ in recent weeks, Redfin CEO says - MarketWatch
Home prices rise at the fastest pace in more than four years, defying expectations of a pullback - MarketWatch-Housing market has hit a ‘significant slowdown’ in recent weeks, Redfin CEO says - MarketWatch
+++++
Markets and Market Commentary:
Donald has announced that he will increase the tariffs applied to Turkey's steel and aluminum exports due to Turkey's currency losing value against the USD:
Turkey's Lira is not being manipulated lower to gain a competitive advantage in exports or as a means to compensate U.S. buyers for the existing tariffs.
Prior to Trump's tweet, the lira was falling in value due to investor concerns that President Recep Tayyip Erdogan's authoritarian and populist government will continue pursuing unsound economic policies, a growing current account deficit and too much debt denominated in foreign currencies (reminiscent of the Asian Contagion). Turkish currency and debt crisis, 2018 Domestic capital was fleeing the country as foreign investors pulled back.
In response to Donald's tweet, the lira lost almost another 16% in value against the USD and markets responded by sending stocks and interest rates down. So does the stable genius increase the tariffs by the amount of that decline which he caused?
Donald may be sending a message to China that U.S. tariffs can be adjusted upward to reflect the Yuan's depreciation against the USD. If that is the case, the stable genius is sending that message in an idiotic way.
Morgan Stanley sees two ‘broken legs’ for stocks, heralding ‘significant market correction’ - MarketWatch
Donald has announced that he will increase the tariffs applied to Turkey's steel and aluminum exports due to Turkey's currency losing value against the USD:
Turkey's Lira is not being manipulated lower to gain a competitive advantage in exports or as a means to compensate U.S. buyers for the existing tariffs.
Prior to Trump's tweet, the lira was falling in value due to investor concerns that President Recep Tayyip Erdogan's authoritarian and populist government will continue pursuing unsound economic policies, a growing current account deficit and too much debt denominated in foreign currencies (reminiscent of the Asian Contagion). Turkish currency and debt crisis, 2018 Domestic capital was fleeing the country as foreign investors pulled back.
In response to Donald's tweet, the lira lost almost another 16% in value against the USD and markets responded by sending stocks and interest rates down. So does the stable genius increase the tariffs by the amount of that decline which he caused?
Donald may be sending a message to China that U.S. tariffs can be adjusted upward to reflect the Yuan's depreciation against the USD. If that is the case, the stable genius is sending that message in an idiotic way.
Morgan Stanley sees two ‘broken legs’ for stocks, heralding ‘significant market correction’ - MarketWatch
U.K.’s International Trade Secretary Liam Fox Says Brexit No-Deal Outcome Is More Likely Than Not - Bloomberg
Fed’s Barkin says interest rates need to rise to ‘normal’ levels - MarketWatch
Fed’s Barkin says interest rates need to rise to ‘normal’ levels - MarketWatch
Rising rates likely to shake stocks to core, Peter Boockvar warns
Warren Buffett’s favorite metric suggests some serious pain awaits investors - MarketWatch (The reference is to GDP valuation metric, a ratio of the total stock market capitalization to GDP, which is currently around 140%); Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator-Advisor Perspectives (the number hit 151.7% in 2000 and at 32.2% and 59.5% near the start of the bull markets in 1982 and 2009 respectively)
Jamie Dimon warns of 5% Treasury yields but sees stock run lasting a few more years - MarketWatch; Jamie Dimon Warns of 5% Treasury Yields - Bloomberg
Warren Buffett’s favorite metric suggests some serious pain awaits investors - MarketWatch (The reference is to GDP valuation metric, a ratio of the total stock market capitalization to GDP, which is currently around 140%); Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator-Advisor Perspectives (the number hit 151.7% in 2000 and at 32.2% and 59.5% near the start of the bull markets in 1982 and 2009 respectively)
Jamie Dimon warns of 5% Treasury yields but sees stock run lasting a few more years - MarketWatch; Jamie Dimon Warns of 5% Treasury Yields - Bloomberg
Stock market to get $1 trillion boost via buybacks, says Goldman - MarketWatch
Cramer: Index fund buying and buybacks are creating a 'stock shortage'
Saudi fund managers ordered to liquidate their Canadian assets as feud escalates - MarketWatch
Campbell Soup downgraded at JP Morgan: Appeal of buying limited
+++
Trump:
Ohio's 12 Congressional District Special Election:
The results in Ohio's 12th congressional district's special election last Tuesday demonstrate how Donald is hurting republican candidates. In the 2016 election, the republican incumbent garnered 251,266 vs. 112,638 for the Democrat challenger.
Given the overall favorable economy, the republican candidate in this special election should have won by a minimum of 10%. Negative reactions to Trump among voters in suburban areas resulted in a razor thin likely victory for the republican candidate.
College educated white women are breaking in a big way for the Democrats since Donald remade the GOP in his image. The gap has widen by 47 points in favor of the Democrats:
White Men with college decrees have started to favor the Democrats after several years of GOP dominance:
Is Bannon right that white, college-educated women have given up on Republicans? - The Washington Post
Those trends are going to make a difference in suburban areas throughout the midwest and northeast as well as a few suburban areas in the south (primarily in Virginia, Georgia, Texas, Florida and North Carolina)
The GOP remained strong in the rural areas of this district. It is possible that the GOP will lose some support in rural farming areas next November due to Trump's tariffs.
Preliminary Results 2018 Special Election (votes still outstanding):
For this special election, vast sums of money were spent by the republicans to hold onto this seat in a gerrymandered district that was drawn to favor a republican candidate.
Part of the district included northern suburbs of Columbus that normally would be republican territory.
The previously unknown democratic candidate Danny O'Connor received 65% of the vote in those Franklin County suburbs.
While I expect the republicans to hold onto this seat for now, the same two candidates will face off against one another in November. Ohio Special Election Too Close To Call : NPR
Don has assured the republicans that a Red Wave is coming in November:
The Democrats would want Trump to campaign in a congressional district with a substantial number of college educated suburbanites.
It is possible that the GOP will still have a majority in the House after the election. For that to happen, the economy will need to in good shape on election day and Donald will need to resolve at least one major trade dispute.
If the tariff wars are accelerating into the November midterms, with agricultural prices plummeting, then the GOP is likely lose the House even if wages, GDP growth, and jobs are still in an upswing.
Soybean prices fell last Friday by about 4.5%. As soybean futures fall, farmer says tariffs have devastated industry American soybean farmers have lost their largest export market-China-due to the trade war.
Soybeans Price: Latest Price & Chart for Soybeans - NASDAQ.com
++
Trump Tower Meeting:
In Shift, Trump Says Tower Meeting Was Held to Get Clinton Dirt - Bloomberg
Trump says his son sought information on Clinton from Russians in 2016 | Reuters
President Admits Trump Tower Meeting Was Meant to Get Dirt on Clinton - The New York Times
The media is treating Trump's admission about the purpose of this meeting as a big deal. It has been obvious since the NYT released emails to and from Donald Jr. that the Trump Tower meeting with the Russians was for the purpose of obtaining dirt on Hillary. Russian Dirt on Clinton? ‘I Love It,’ Donald Trump Jr. Said-The New York Times Nonetheless, it would be better for Donald just to keep his mouth shut on this topic.
The more important questions now are whether Daddy Donald knew about the meeting beforehand (wanting it to take place) and more importantly whether anything concrete was done to receive that kind of information from the Russians after the meeting (e.g. DNC or Hillary emails; money sourced from the Russian entities or nationals).
One of the big questions whose answer may be known now by Mueller is whether funneled money to Trump through the NRA: The N.R.A. Spent $30 Million to Elect Trump. Was It Russian Money? | Vanity Fair; More evidence emerges on the NRA’s Russia connection. | The New Republic;U.S. officials charge NRA-linked Russian with acting as Kremlin agent - POLITICO
+++++
Poll: Nearly half of Republicans think Trump should have authority to shutter media outlets | TheHill There is a strong authoritarian core in the modern day GOP.
Report: Trump in danger of wasting billions on border wall (the report is from the U.S. Government Accountability Office)
Ohio's 12 Congressional District Special Election:
The results in Ohio's 12th congressional district's special election last Tuesday demonstrate how Donald is hurting republican candidates. In the 2016 election, the republican incumbent garnered 251,266 vs. 112,638 for the Democrat challenger.
Given the overall favorable economy, the republican candidate in this special election should have won by a minimum of 10%. Negative reactions to Trump among voters in suburban areas resulted in a razor thin likely victory for the republican candidate.
College educated white women are breaking in a big way for the Democrats since Donald remade the GOP in his image. The gap has widen by 47 points in favor of the Democrats:
White Men with college decrees have started to favor the Democrats after several years of GOP dominance:
Is Bannon right that white, college-educated women have given up on Republicans? - The Washington Post
Those trends are going to make a difference in suburban areas throughout the midwest and northeast as well as a few suburban areas in the south (primarily in Virginia, Georgia, Texas, Florida and North Carolina)
The GOP remained strong in the rural areas of this district. It is possible that the GOP will lose some support in rural farming areas next November due to Trump's tariffs.
Preliminary Results 2018 Special Election (votes still outstanding):
For this special election, vast sums of money were spent by the republicans to hold onto this seat in a gerrymandered district that was drawn to favor a republican candidate.
Part of the district included northern suburbs of Columbus that normally would be republican territory.
The previously unknown democratic candidate Danny O'Connor received 65% of the vote in those Franklin County suburbs.
While I expect the republicans to hold onto this seat for now, the same two candidates will face off against one another in November. Ohio Special Election Too Close To Call : NPR
Don has assured the republicans that a Red Wave is coming in November:
It is possible that the GOP will still have a majority in the House after the election. For that to happen, the economy will need to in good shape on election day and Donald will need to resolve at least one major trade dispute.
If the tariff wars are accelerating into the November midterms, with agricultural prices plummeting, then the GOP is likely lose the House even if wages, GDP growth, and jobs are still in an upswing.
Soybean prices fell last Friday by about 4.5%. As soybean futures fall, farmer says tariffs have devastated industry American soybean farmers have lost their largest export market-China-due to the trade war.
Soybeans Price: Latest Price & Chart for Soybeans - NASDAQ.com
++
Trump Tower Meeting:
In Shift, Trump Says Tower Meeting Was Held to Get Clinton Dirt - Bloomberg
Trump says his son sought information on Clinton from Russians in 2016 | Reuters
President Admits Trump Tower Meeting Was Meant to Get Dirt on Clinton - The New York Times
The media is treating Trump's admission about the purpose of this meeting as a big deal. It has been obvious since the NYT released emails to and from Donald Jr. that the Trump Tower meeting with the Russians was for the purpose of obtaining dirt on Hillary. Russian Dirt on Clinton? ‘I Love It,’ Donald Trump Jr. Said-The New York Times Nonetheless, it would be better for Donald just to keep his mouth shut on this topic.
The more important questions now are whether Daddy Donald knew about the meeting beforehand (wanting it to take place) and more importantly whether anything concrete was done to receive that kind of information from the Russians after the meeting (e.g. DNC or Hillary emails; money sourced from the Russian entities or nationals).
One of the big questions whose answer may be known now by Mueller is whether funneled money to Trump through the NRA: The N.R.A. Spent $30 Million to Elect Trump. Was It Russian Money? | Vanity Fair; More evidence emerges on the NRA’s Russia connection. | The New Republic;U.S. officials charge NRA-linked Russian with acting as Kremlin agent - POLITICO
+++++
Poll: Nearly half of Republicans think Trump should have authority to shutter media outlets | TheHill There is a strong authoritarian core in the modern day GOP.
Kushner ordered his newspaper to delete article about friend Silver (Kushner owned and operated the New York Observer)
Mike Pence once argued a president could be removed on moral grounds - MarketWatch I wonder whether Pence views an average of 7.6 lies per day by Trump as moral.
Commerce Secretary Wilbur Ross accused of swindling business associates out of more than $120 million; New Details About Wilbur Ross’ Business Point To Pattern Of Grifting: Forbes
New York GOP Rep. Chris Collins arrested over insider trading charges Collins represents New York's 27th congressional district which Don won in 2016 with 59.7% of the vote. Collins supported the 2017 tax bill that limited the deductibility of state income and property taxes to $10K. Collins was the first congressional representative to endorse Donald. The proof looks overwhelming to me that Collins is guilty. He was on the Board of a drug company whose main product failed a trial. Knowing that his son Cameron owned a lot of stock (approximately 2.3% of the outstanding shares), Collins allegedly called Cameron immediately after learning about this material, non-public information as a Board member that allowed Cameron, his fiance and the fiance's father Stephen Zarsky to unload their positions before the company lost 92% of its value. The fiance was named as an unindicted co-conspirator which indicates to me that she is a cooperating witness. Other unindicted co-conspirators include Zarksy's two brothers and his wife. Indictment It is of course irrelevant that Chris Collins did not sell any shares.
Omarosa Secretly Recorded Trump—And Played the Audio for People, Sources Say Maybe there is a tape of Donald throwing a temper tantrum which apparently occurs with regularity. Omarosa book claims there are tapes of Trump using N-word on ‘Apprentice’ set | TheHill (if those tapes exist, no one should be surprised that Donald talks like a racist) In response, Donald called Omarosa a "low life". Both Omarosa and Donald have zero credibility IMO.
President Trump’s temper tantrums are coming at an accelerating pace - The Washington Post;
The volcanic temper of Donald Trump - CNN
Trump had a temper tantrum over the Philadelphia Eagles and tried to make it about patriotism; Trump tantrum after Cohen raid reaffirms his unfitness for office | TheHill
What do you expect from someone who never matured beyond a mean spirited 5 year old brat.
Trump and Climate Change:
Donald Trump will blame anything but climate change for the California wildfires; White House can't -- or won't -- explain Trump's wildfire tweets - CNN
There is no shortage of water. Water is not being dumped into the Pacific Ocean. Scorching heat and dry conditions are the causes, and what causes those conditions to happen with increasing frequency Donald? July was the hottest month on record in California. California heat: July was state's hottest month ever recorded: USA Today; Record heat in California is no fluke, experts warn Arson may have been responsible for one of the wildfires.
California wildfires made worse by hot, dry conditions, not water policy, as Trump tweeted
In a strikingly ignorant tweet, Trump gets almost everything about California wildfires wrong Donald is ignorant but that will not stop him from creating his own reality for political purposes. He wants to change the narrative to blame the California Democrats for the wildfires rather than to admit the impact of climate change.
Yes, Donald Trump did call climate change a Chinese hoax | PolitiFact
Mike Pence once argued a president could be removed on moral grounds - MarketWatch I wonder whether Pence views an average of 7.6 lies per day by Trump as moral.
Commerce Secretary Wilbur Ross accused of swindling business associates out of more than $120 million; New Details About Wilbur Ross’ Business Point To Pattern Of Grifting: Forbes
New York GOP Rep. Chris Collins arrested over insider trading charges Collins represents New York's 27th congressional district which Don won in 2016 with 59.7% of the vote. Collins supported the 2017 tax bill that limited the deductibility of state income and property taxes to $10K. Collins was the first congressional representative to endorse Donald. The proof looks overwhelming to me that Collins is guilty. He was on the Board of a drug company whose main product failed a trial. Knowing that his son Cameron owned a lot of stock (approximately 2.3% of the outstanding shares), Collins allegedly called Cameron immediately after learning about this material, non-public information as a Board member that allowed Cameron, his fiance and the fiance's father Stephen Zarsky to unload their positions before the company lost 92% of its value. The fiance was named as an unindicted co-conspirator which indicates to me that she is a cooperating witness. Other unindicted co-conspirators include Zarksy's two brothers and his wife. Indictment It is of course irrelevant that Chris Collins did not sell any shares.
Omarosa Secretly Recorded Trump—And Played the Audio for People, Sources Say Maybe there is a tape of Donald throwing a temper tantrum which apparently occurs with regularity. Omarosa book claims there are tapes of Trump using N-word on ‘Apprentice’ set | TheHill (if those tapes exist, no one should be surprised that Donald talks like a racist) In response, Donald called Omarosa a "low life". Both Omarosa and Donald have zero credibility IMO.
President Trump’s temper tantrums are coming at an accelerating pace - The Washington Post;
The volcanic temper of Donald Trump - CNN
Trump had a temper tantrum over the Philadelphia Eagles and tried to make it about patriotism; Trump tantrum after Cohen raid reaffirms his unfitness for office | TheHill
What do you expect from someone who never matured beyond a mean spirited 5 year old brat.
Trump and Climate Change:
Donald Trump will blame anything but climate change for the California wildfires; White House can't -- or won't -- explain Trump's wildfire tweets - CNN
There is no shortage of water. Water is not being dumped into the Pacific Ocean. Scorching heat and dry conditions are the causes, and what causes those conditions to happen with increasing frequency Donald? July was the hottest month on record in California. California heat: July was state's hottest month ever recorded: USA Today; Record heat in California is no fluke, experts warn Arson may have been responsible for one of the wildfires.
California wildfires made worse by hot, dry conditions, not water policy, as Trump tweeted
In a strikingly ignorant tweet, Trump gets almost everything about California wildfires wrong Donald is ignorant but that will not stop him from creating his own reality for political purposes. He wants to change the narrative to blame the California Democrats for the wildfires rather than to admit the impact of climate change.
Yes, Donald Trump did call climate change a Chinese hoax | PolitiFact
+++
1. Small Cap Biotech Lottery Ticket Basket Strategy:
This basket has not been working as of late. Shares of several have retreated in price after favorable news including PGNX discussed below.
A. Bought 10 PGNX at $7.76-Used Commission Free Trade:
Quote: Progenics Pharmaceuticals Inc. (PGNX)
Closing Price Last Friday: PGNX +8.13 +$0.06 $0.74%
Position: 60 Shares
Average Cost Per Share: $8.35
Prior Round-Trips: +$342.75
Some Prior Discussions:
Item # 4 Bought 50 PGNX at $5.94 Update For Healthcare Basket Strategy As Of 7/29/16-Growing Lottery Ticket Component - South Gent | Seeking Alpha
South Gent's Comment Blog # 3: Bought 50 PGNX at $4.95
Item # 4.B. Sold 30 PGNX at $8.24 (3/19/18)
Recent News:
The shares tanked after the FDA approved the leading pipeline candidate AZEDRA for the treatment of two rare cancers.
The drug was approved "for the treatment of adult and pediatric patients 12 years and older with iobenguane scan positive, unresectable, locally advanced or metastatic pheochromocytoma or paraganglioma who require systemic anticancer therapy. AZEDRA is the first and only approved therapy for this indication." Progenics Pharmaceuticals Announces FDA Approval for AZEDRA® (iobenguane I 131) to Treat Unresectable, Locally Advanced or Metastatic Pheochromocytoma or Paraganglioma
AZEDRA Promotional Website Proposal + next steps
The company plans to price this drug at $147K per dose with patients receiving one or two doses.
Most of the patients are being treated at 25 health centers. In most cases, those centers have already used the drug on patients during the trials. Given the small number of patients who are diagnosed each year with one of these cancers, somewhere generally between 750 to 1500, and prior physician familiarity with this drug and its administration, the marketing expense will be relatively limited for a newly approved compound.
The shares recovered somewhat until PGNX launched a stock offering on 8/8/18: Closing Price PGNX $8.22 -$0.71 -7.95%
Part of the downdraft after announcing the FDA's Azedra approval was probably due to an anticipated share offering.
I would regard the offering as favorable. Progenics Pharmaceuticals Announces Pricing of Public Offering of Common Stock The company sold 9,090,909 primary shares of its common stock at a public offering price of $8.25 per share. The underwriters may buy up to an additional 1,363,636 shares in a standard greenshoe overallotment (15%).
Progenics Pharmaceuticals Presents Data Validating its Artificial Intelligence Imaging Analysis Technology for Use with PSMA-Targeted SPECT/CT (6/25/18)
Progenics Announces JAMA Oncology Publication Highlighting Company’s Imaging Analysis Platform (5/22/18)
Last Earnings Report:
Following Azedra’s Approval, Progenics Pharmaceuticals Announces Second Quarter 2018 Financial Results and Business Update
10-Q for the Q/E 6/30/18 (cash at $87.49M)
Imaging Pipeline Progress: The next trial result will be for the PSMA-Targeted SPECT/CT Imaging Agent 1404 which is expected in the third quarter.
1404 Technology: Small Molecule Diagnostic
PyL: PSMA Targeted PET Imaging Agent
Imaging Agents Pipeline Chart:
Relistor:
The company has one other approved drug, Relistor, that is licensed to Bausch Health Companies, Inc. (formerly known as Valeant Pharmaceuticals. The total royalty revenue for this product was $3.5M with U.S. net sales increasing 44% over the 2017 second quarter.
PGNX entered into a $50M non-recourse loan agreement where it pledged its relistor royalties to pay interest at 9.5% and the principal amount. The terms are set out more fully in the snapshot below:
This kind of deal is generally viewed as more favorable than a dilutive share offering. It is possible that some of the royalty payment amount will be retained until September 30, 2021 (possibly earlier) when the lender can require that all of the royalty be applied to interest and the remaining principal amount until the loan is repaid. The loan matures on 6/30/25 and is non-recourse to PGNX, meaning the lender can not recover any remaining balance from PGNX at or after the maturity date.
When Relistor revenues hit $100M in a single year, Valeant will pay a $10M milestone payment to PGNX. Further milestone payments may be made based on revenues in a single calendar year:
Page 6 2017 Annual Report
It is my understanding that the milestone payments, when and if made, are not applied to the outstanding loan.
None of those milestones have yet to be hit.
Valeant paid $40M to PGNX when the FDA approved the marketing application in 2014.
B. Bought 20 TXMD at $5.25-Used Commission Free Trade:
Quote: TherapeuticsMD Inc. (TXMD)
TXMD Analyst Estimates (loss in 2018 and 2019)
Website: TherapeuticsMD
Position in The Account: 50 Shares
Average Cost Per Share: $5.63
Last Discussed: Item # 1.E. Bought 30 TXMD at $5.88 (6/7/18 Post)
I thought that this company had a positive capital raise. The company sold $65M in common stock, plus up to an additional 1,911,764 shares in a greenshoe, at $5.1. A strategic investor bought another $20M in stock at $5.1. TherapeuticsMD Announces Pricing of Its Underwritten Public Offering and Concurrent Registered Direct Offering for Aggregate Gross Proceeds of $85 Million
The strategic purchaser was Knight Therapeutics Inc. (Canada: Toronto) who received a license to commercialize Imvexxy and TX-001HR inCanada and Israel .
"Under the terms of the licensing agreement, Knight will payTherapeuticsMD a milestone fee upon first regulatory approval in Canada of each of TX-004HR and TX-001HR, sales milestone fees based upon certain aggregate annual sales in Canada and Israel of each of TX-004HR and TX-001HR and royalties based on aggregate annual sales of each of TX-004HR and TX-001HR in Canada and Israel . Knight will be responsible for all regulatory and commercial activities in Canada and Israel related to TX-004HR and TX-001HR." Knight also agreed to buy $20M in TXMD stock. Knight Therapeutics and TherapeuticsMD Announce Strategic Partnership
The proceeds will be used in part to support the commercial launch of the "recently FDA approved product, IMVEXXY™ (estradiol vaginal inserts) for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy."
This basket has not been working as of late. Shares of several have retreated in price after favorable news including PGNX discussed below.
A. Bought 10 PGNX at $7.76-Used Commission Free Trade:
Quote: Progenics Pharmaceuticals Inc. (PGNX)
Closing Price Last Friday: PGNX +8.13 +$0.06 $0.74%
Position: 60 Shares
Average Cost Per Share: $8.35
Prior Round-Trips: +$342.75
Some Prior Discussions:
Item # 4 Bought 50 PGNX at $5.94 Update For Healthcare Basket Strategy As Of 7/29/16-Growing Lottery Ticket Component - South Gent | Seeking Alpha
South Gent's Comment Blog # 3: Bought 50 PGNX at $4.95
Item # 4.B. Sold 30 PGNX at $8.24 (3/19/18)
Recent News:
The shares tanked after the FDA approved the leading pipeline candidate AZEDRA for the treatment of two rare cancers.
The drug was approved "for the treatment of adult and pediatric patients 12 years and older with iobenguane scan positive, unresectable, locally advanced or metastatic pheochromocytoma or paraganglioma who require systemic anticancer therapy. AZEDRA is the first and only approved therapy for this indication." Progenics Pharmaceuticals Announces FDA Approval for AZEDRA® (iobenguane I 131) to Treat Unresectable, Locally Advanced or Metastatic Pheochromocytoma or Paraganglioma
AZEDRA Promotional Website Proposal + next steps
The company plans to price this drug at $147K per dose with patients receiving one or two doses.
Most of the patients are being treated at 25 health centers. In most cases, those centers have already used the drug on patients during the trials. Given the small number of patients who are diagnosed each year with one of these cancers, somewhere generally between 750 to 1500, and prior physician familiarity with this drug and its administration, the marketing expense will be relatively limited for a newly approved compound.
The shares recovered somewhat until PGNX launched a stock offering on 8/8/18: Closing Price PGNX $8.22 -$0.71 -7.95%
Part of the downdraft after announcing the FDA's Azedra approval was probably due to an anticipated share offering.
I would regard the offering as favorable. Progenics Pharmaceuticals Announces Pricing of Public Offering of Common Stock The company sold 9,090,909 primary shares of its common stock at a public offering price of $8.25 per share. The underwriters may buy up to an additional 1,363,636 shares in a standard greenshoe overallotment (15%).
Progenics Pharmaceuticals Presents Data Validating its Artificial Intelligence Imaging Analysis Technology for Use with PSMA-Targeted SPECT/CT (6/25/18)
Progenics Announces JAMA Oncology Publication Highlighting Company’s Imaging Analysis Platform (5/22/18)
Last Earnings Report:
Following Azedra’s Approval, Progenics Pharmaceuticals Announces Second Quarter 2018 Financial Results and Business Update
10-Q for the Q/E 6/30/18 (cash at $87.49M)
Imaging Pipeline Progress: The next trial result will be for the PSMA-Targeted SPECT/CT Imaging Agent 1404 which is expected in the third quarter.
1404 Technology: Small Molecule Diagnostic
PyL: PSMA Targeted PET Imaging Agent
Imaging Agents Pipeline Chart:
The company has one other approved drug, Relistor, that is licensed to Bausch Health Companies, Inc. (formerly known as Valeant Pharmaceuticals. The total royalty revenue for this product was $3.5M with U.S. net sales increasing 44% over the 2017 second quarter.
PGNX entered into a $50M non-recourse loan agreement where it pledged its relistor royalties to pay interest at 9.5% and the principal amount. The terms are set out more fully in the snapshot below:
This kind of deal is generally viewed as more favorable than a dilutive share offering. It is possible that some of the royalty payment amount will be retained until September 30, 2021 (possibly earlier) when the lender can require that all of the royalty be applied to interest and the remaining principal amount until the loan is repaid. The loan matures on 6/30/25 and is non-recourse to PGNX, meaning the lender can not recover any remaining balance from PGNX at or after the maturity date.
When Relistor revenues hit $100M in a single year, Valeant will pay a $10M milestone payment to PGNX. Further milestone payments may be made based on revenues in a single calendar year:
It is my understanding that the milestone payments, when and if made, are not applied to the outstanding loan.
None of those milestones have yet to be hit.
Valeant paid $40M to PGNX when the FDA approved the marketing application in 2014.
B. Bought 20 TXMD at $5.25-Used Commission Free Trade:
Quote: TherapeuticsMD Inc. (TXMD)
TXMD Analyst Estimates (loss in 2018 and 2019)
Website: TherapeuticsMD
Position in The Account: 50 Shares
Average Cost Per Share: $5.63
Last Discussed: Item # 1.E. Bought 30 TXMD at $5.88 (6/7/18 Post)
I thought that this company had a positive capital raise. The company sold $65M in common stock, plus up to an additional 1,911,764 shares in a greenshoe, at $5.1. A strategic investor bought another $20M in stock at $5.1. TherapeuticsMD Announces Pricing of Its Underwritten Public Offering and Concurrent Registered Direct Offering for Aggregate Gross Proceeds of $85 Million
The strategic purchaser was Knight Therapeutics Inc. (Canada: Toronto) who received a license to commercialize Imvexxy and TX-001HR in
"Under the terms of the licensing agreement, Knight will pay
The proceeds will be used in part to support the commercial launch of the "recently FDA approved product, IMVEXXY™ (estradiol vaginal inserts) for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy."
Part of the proceeds may be used to make the milestone payments to the Population Council in exchange for an exclusive commercial license to commercialize its investigational segesterone acetate/ ethinyl estradiol one-year vaginal system for contraception in the United States (U.S.).
Last Friday, the FDA approved this birth control product. TherapeuticsMD Announces FDA Approval of ANNOVERA™ (Segesterone Acetate/Ethinyl Estradiol Vaginal System) for Birth Control This announcement was made late in the trading day and had no impact on the stock price before the close.
Closing Price Last Friday: TXMD $5.24 $0.05 +0.96% (the price was higher earlier in the day before the announcement)
The first milestone payment is $20M upon FDA approval and another $20M upon release of the first commercial batch. TherapeuticsMD Licenses Population Council’s Novel Segesterone Acetate/ Ethinyl Estradiol One-Year Vaginal Contraceptive System
Last Friday, the FDA approved this birth control product. TherapeuticsMD Announces FDA Approval of ANNOVERA™ (Segesterone Acetate/Ethinyl Estradiol Vaginal System) for Birth Control This announcement was made late in the trading day and had no impact on the stock price before the close.
Closing Price Last Friday: TXMD $5.24 $0.05 +0.96% (the price was higher earlier in the day before the announcement)
The first milestone payment is $20M upon FDA approval and another $20M upon release of the first commercial batch. TherapeuticsMD Licenses Population Council’s Novel Segesterone Acetate/ Ethinyl Estradiol One-Year Vaginal Contraceptive System
2. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 JP Morgan 2.25% SU Bonds Maturing on 1/23/2020:
FINRA Page: Bond Detail (prospectus linked)
Issuer: JPMorgan Chase & Co. (JPM)
Credit Ratings: Shown in Confirmation
Bought at a Total Cost of 99.2 (with $4 Vanguard commission)
YTM at TC Then at 2.807%
Current Yield at TC = 2.2681%
At the time of this purchase, the yield of the Vanguard Prime Money Market fund, the source of funds for this purchase, was 2.06%. I am expecting that the yield will trend up slightly when the Federal Reserve increases its FF rate. I do not expect the yield to exceed the current yield of this bond prior to December 2018, nor the YTM prior to mid-2019. It is also possible that the MM yield will never exceed this bond's YTM prior to its maturity.
B. Bought 2 Wells Fargo 2.45% CDs (monthly interest payments) Maturing on 9/16/19:
C. Bought 1 Bank of New York 2.6% SU Bonds Maturing on 8/17/20:
FINRA Page: Bond Detail
Issuer: Bank of New York Mellon Corp. (BK)
BK Analyst Estimates
Earnings Report for the Q/E 6/30/18
BK SEC Filings
Credit Ratings:
Bought at a Total Cost of 99.233
YTM at TC Then at 2.99%
Current Yield at TC = 2.6201%
D. Bought 1 Treasury 1.5% Coupon Maturing on 5/31/19:
YTM = 2.342%
The following is a snapshot of CDs yields for May 2019 maturities which were available for purchase when I bought this treasury. The highest rate was 2.1%.
Why would I buy a less liquid instrument paying a .25% lower yield?
B. Bought 2 Wells Fargo 2.45% CDs (monthly interest payments) Maturing on 9/16/19:
C. Bought 1 Bank of New York 2.6% SU Bonds Maturing on 8/17/20:
FINRA Page: Bond Detail
Issuer: Bank of New York Mellon Corp. (BK)
BK Analyst Estimates
Earnings Report for the Q/E 6/30/18
BK SEC Filings
Credit Ratings:
Bought at a Total Cost of 99.233
YTM at TC Then at 2.99%
Current Yield at TC = 2.6201%
D. Bought 1 Treasury 1.5% Coupon Maturing on 5/31/19:
YTM = 2.342%
The following is a snapshot of CDs yields for May 2019 maturities which were available for purchase when I bought this treasury. The highest rate was 2.1%.
Why would I buy a less liquid instrument paying a .25% lower yield?
3. Small Ball:
A. Bought 10 SLV at $14.48-Used Commission Free Trade:
Quote: iShares Silver Trust Overview
Closing Price Last Friday: SLV $14.41 -$0.11 -0.76%
This fund owns silver bullion.
Position: 40 Shares
Maximum Position: 100 Shares
Average Cost Per Share: $15.16
Purchase Restriction: Small Ball Purchase Rule
SLV Chart
Silver has been in a long term secular bear market since 2011. That fact needs to be front and center when buying precious metals now.
The last bull market started in 2002 and ended in 2011. Silver went over $45 per ounce in April 2011. Silver Price Chart The price is now less than $16 per ounce. The most recent decline coincided with renewed USD strength.
I have periodically traded this security for small gains. (see snapshots at Item # 2.C.)
I sold silver bullion in September 2011 for the first time and again in January 2012. I have not sold any since then. Item # 1 (9/15/11 Post); Item # 8 Snapshots of Coin Sales In January 2012 (1/31/12) I have not bought any bullion since 1990.
B. Bought 10 at APLE at $17.6-Used Commission Free Trade:
I am simply using up my Schwab commission free trades to buy some income producing stocks. Those commission free trades expired on 8/9/18, but I received another 30 after making a justified complaint.
Quote: Apple Hospitality REIT Inc. (APLE)
Website: Apple Hospitality REIT
Hotel Map
APLE SEC Filings
Last Discussed: Item 1.B. Bought 50 APLE at $17.92-In a Roth IRA Account (7/9/18 Post)
I own this REIT stock in several accounts.
Current Position in This Account: 114+ Shares
Average Cost Per Share: $17.75
Dividend: Monthly at $.10 ($1.2 annually)
Dividend Yield at a TC of $17.75 = 6.76%
Last Ex Dividend Date: 8/1/18
Apple Hospitality REIT Announces August 2018 Distribution
Reinvestment: Currently Yes (except for shares held in IB account)
Total APLE Position in All Accounts = 392+ shares
Last Earnings Report- Q/E 6/30/18 (released on 8/6/18 after purchase):
I thought that the report was okay but the market disagrees. The stock has been falling in response.
Closing Price Last Friday: APLE $17.24 -$0.12 -0.69%
Apple Hospitality REIT Reports Results of Operations for Second Quarter 2018
For the Q/E 6/30/18, modified funds from operation was reported at $.51 per share in line with estimates. References to comparable hotels in the snapshot below refer to 231 hotels:
There were slight increases in RevPar, average daily rate and occupancy levels year over year.
MFFO Calculation:
2018 Guidance:
CEO Justin Knight on Q2 2018 Results - Earnings Call Transcript | Seeking Alpha
I will limit further purchases to my "small ball buying program" in my Fidelity account where I have an abundance of commission free trades. The lowest purchase price in that chain is at $17.1.
Last Sell Discussions:
Item # 5.A. Sold 50 APLE at $19.6 (12/18/17 Post)
Item # 6.B. Sold Highest Cost Lot in Schwab at $19.22 (10/19/17 Post)
Item 2.B. Sold 100 APLE at $19.43(5/25/17 Post)
C. Sold 50 NHLD at $3.35:
Profit Snapshot: +$7.63
Item # 1.E. Bought 50 NHLD at $3.16 (7/15/18 Post)
This sale is solely in response to this article: Special Report: Biotech incubator taps investors through in-house brokerage | Reuters
++
4. Intermediate Term Bond/CD Ladder Basket Strategy:
I am knocking my allocation down a slither.
A. Sold 2 CSX 3.35% SU Bonds Maturing on 11/1/25:
FINRA Page: Bond Detail
Profit Snapshot: +$19.52
Item # 2.A. Bought 2 CSX 3.35% SU Bonds Maturing on 11/1/25 at a Total Cost of 96.656 (6/4/18 Post)
A persistent problem among brokerages is the use of a third party service to price bonds rather than actual closing trades. I have yet to see a third party price higher than the market price.
I took a snapshot of how a third party priced this CSX bond in my account shortly before I sold it at 97.732:
The 97.732 was not the best bid price either, but what I would call the convenient price that allowed me to sell the bond quickly rather than trying to angle for a slightly higher price with a day limit order that split the best bid and ask prices. Most of the time, that kind of small lot order is just ignored:
Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.
A. Bought 10 SLV at $14.48-Used Commission Free Trade:
Quote: iShares Silver Trust Overview
Closing Price Last Friday: SLV $14.41 -$0.11 -0.76%
This fund owns silver bullion.
Position: 40 Shares
Maximum Position: 100 Shares
Average Cost Per Share: $15.16
Purchase Restriction: Small Ball Purchase Rule
SLV Chart
Silver has been in a long term secular bear market since 2011. That fact needs to be front and center when buying precious metals now.
The last bull market started in 2002 and ended in 2011. Silver went over $45 per ounce in April 2011. Silver Price Chart The price is now less than $16 per ounce. The most recent decline coincided with renewed USD strength.
I have periodically traded this security for small gains. (see snapshots at Item # 2.C.)
I sold silver bullion in September 2011 for the first time and again in January 2012. I have not sold any since then. Item # 1 (9/15/11 Post); Item # 8 Snapshots of Coin Sales In January 2012 (1/31/12) I have not bought any bullion since 1990.
B. Bought 10 at APLE at $17.6-Used Commission Free Trade:
Quote: Apple Hospitality REIT Inc. (APLE)
Website: Apple Hospitality REIT
Hotel Map
APLE SEC Filings
Last Discussed: Item 1.B. Bought 50 APLE at $17.92-In a Roth IRA Account (7/9/18 Post)
I own this REIT stock in several accounts.
Current Position in This Account: 114+ Shares
Average Cost Per Share: $17.75
Dividend: Monthly at $.10 ($1.2 annually)
Dividend Yield at a TC of $17.75 = 6.76%
Last Ex Dividend Date: 8/1/18
Apple Hospitality REIT Announces August 2018 Distribution
Reinvestment: Currently Yes (except for shares held in IB account)
Total APLE Position in All Accounts = 392+ shares
Last Earnings Report- Q/E 6/30/18 (released on 8/6/18 after purchase):
I thought that the report was okay but the market disagrees. The stock has been falling in response.
Closing Price Last Friday: APLE $17.24 -$0.12 -0.69%
Apple Hospitality REIT Reports Results of Operations for Second Quarter 2018
For the Q/E 6/30/18, modified funds from operation was reported at $.51 per share in line with estimates. References to comparable hotels in the snapshot below refer to 231 hotels:
There were slight increases in RevPar, average daily rate and occupancy levels year over year.
MFFO Calculation:
2018 Guidance:
CEO Justin Knight on Q2 2018 Results - Earnings Call Transcript | Seeking Alpha
I will limit further purchases to my "small ball buying program" in my Fidelity account where I have an abundance of commission free trades. The lowest purchase price in that chain is at $17.1.
Last Sell Discussions:
Item # 5.A. Sold 50 APLE at $19.6 (12/18/17 Post)
Item # 6.B. Sold Highest Cost Lot in Schwab at $19.22 (10/19/17 Post)
Item 2.B. Sold 100 APLE at $19.43(5/25/17 Post)
C. Sold 50 NHLD at $3.35:
Profit Snapshot: +$7.63
Item # 1.E. Bought 50 NHLD at $3.16 (7/15/18 Post)
This sale is solely in response to this article: Special Report: Biotech incubator taps investors through in-house brokerage | Reuters
++
4. Intermediate Term Bond/CD Ladder Basket Strategy:
I am knocking my allocation down a slither.
A. Sold 2 CSX 3.35% SU Bonds Maturing on 11/1/25:
FINRA Page: Bond Detail
Profit Snapshot: +$19.52
A persistent problem among brokerages is the use of a third party service to price bonds rather than actual closing trades. I have yet to see a third party price higher than the market price.
I took a snapshot of how a third party priced this CSX bond in my account shortly before I sold it at 97.732:
 |
| Third Party Price at Time of Sell Order = 97.129 |
 |
| Order Book (time and date shown) |
The one year treasury bill will be auctioned tomorrow:
ReplyDeletehttps://www.treasury.gov/resource-center/data-chart-center/quarterly-refunding/Documents/auctions.pdf
Like the 4, 13 and 26 week bills, the one year bill is sold without a coupon. The difference between the discount to par value and par value is the interest.
I had a $2K 10 month CD mature today that paid monthly interest at 1.4%. I will use the proceeds to buy 2 of the 1 year treasury bill at tomorrow's auction.
The one year T Bill is currently trading at a 2.418% yield which is down from 2.44% earlier this morning.
https://www.marketwatch.com/investing/bond/tmubmusd01y?countrycode=bx
The 3 month T Bill was auctioned today at a 2.03% yield, up from 2.01% in last Monday's auction.
https://www.treasurydirect.gov/instit/annceresult/annceresult.htm
For no good reason, the Stable Genius threw gasoline on a simmering currency crisis in Turkey. The lira lost about 8.5% of its value today against the USD.
ReplyDeletehttps://www.bloomberg.com/quote/USDTRY:CUR
European banks in particular will act as a conduit for the contagion effect.
https://www.bloomberg.com/news/articles/2018-08-13/turkey-s-collapse-sinks-emerging-markets-on-manic-monday
Turkey's financial problems, which are being aggravated substantially by the lira's declining value, is spilling over into emerging market bonds and stocks and is causing renewed strength in the U.S.D. The gain in the U.S.D. is probably the precipitating cause in precious metal prices renewing their downward acceleration.
Vanguard FTSE Emerging Markets ETF
$41.70 -$0.66 -1.56%
52 WEEK RANGE
41.03 - 50.99
https://www.marketwatch.com/investing/fund/vwo
SPDR Gold Shares
$112.97 -$1.72 -1.50%
52 WEEK RANGE 112.83 - 129.52
Day's Range 112.83 - 113.81 (new 52 week low)
https://www.marketwatch.com/investing/fund/gld
U.S. Dollar Index (DXY)
96.36 +1.18 +1.24%
52 WEEK RANGE 88.25 - 96.52
DAY RANGE 95.16 - 96.52 (new 52 week high)
https://www.marketwatch.com/investing/index/dxy
Harley-Davidson (HOG) declined 4.35% today as the U.S. President publicly announced his support for U.S. customers boycotting Harley's manufactured in the U.S. since Harley found it necessary to move production for the European market overseas due to Donald's tariff war precipitating a 25% increase in European tariffs applied to Harley shipped from the U.S. The new total is 31% which makes the U.S. made Harley non-competitive in the EU.
AXA Equitable Holdings Inc (EQH)
ReplyDeletehttps://www.marketwatch.com/investing/stock/eqh/analystestimates
EQH reported second quarter non-GAAP E.P.S. of $.9 per share, beating the consensus estimate of $.86. GAAP earnings per share was reported at $.28 per share. The main difference is a $.5 per share addition to GAAP E.P.S. for "Variable annuity product features" which is defined to include "certain changes in the fair value of the derivatives and other securities we use to hedge these features, the effect of benefit ratio unlock adjustments and changes in the fair value of the embedded derivatives reflected within Variable annuity products’ net derivative results". My overall opinion is that institutional investors do not pay a whole lot of attention to non-GAAP numbers so far out of whack with the GAAP numbers which explains EQH's low forward P/E which is based on non-GAAP estimates. The P/E based on estimated 2019 non-GAAP E.P.S. is around 6.
Total AUM was $656 billion, up 4% compared to the second quarter of 2017.
https://www.businesswire.com/news/home/20180813005643/en/
The company also declared its first quarterly dividend as a public company, which is a miserly $.13 per share.
I am in the midst of a "small ball buying program" for this stock with my lowest purchase being at $20.24.
I have published a new post.
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/08/observations-and-sample-of-recent_15.html