Do you like to follow the buying trends of smart money investors? We ran a screen to find drugmaker stocks currently in favor by hedge fund managers.
We began by screening for stocks with high growth projections, with 5-year projected EPS growth rates above 15%.
Then we screened for bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers, which often have more sophisticated market data on hand than main street investors, expect these names to outperform.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research. We found that all three stocks averaged a moderate buy rating or higher. They have largely retained these ratings over the past two years.
Do you think these stocks will soon price in more value? Use this list as a starting point for your own analysis.
1. MAP Pharmaceuticals, Inc. (MAPP): Focuses on the development and commercialization of inhalation therapies for patients suffering from migraine. Market cap at $547.7M, most recent closing price at $15.52. 5-year EPS growth projected at 49%. Net institutional purchases in the current quarter at 3.9M shares, which represents about 13.12% of the company's float of 29.72M shares.
2. USANA Health Sciences Inc. (USNA): Develops, manufactures, distributes, and sells nutritional and personal care products worldwide. Market cap at $632.03M, most recent closing price at $43.80. 5-year EPS growth projected at 16%. Net institutional purchases in the current quarter at 1.4M shares, which represents about 21.94% of the company's float of 6.38M shares.
3. Ligand Pharmaceuticals Incorporated (LGND): Operates as a biotechnology company. Market cap at $389.83M, most recent closing price at $19.55. 5-year EPS growth projected at 17%. Net institutional purchases in the current quarter at 1.6M shares, which represents about 11.87% of the company's float of 13.48M shares.
Institutional data sourced from Fidelity, EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.