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If you like to follow the buying trends of the "smart money," you may also like to follow the buying trends of company insiders. Company insiders, such as members of the board and upper management, report when they buy shares of their company. When they do, this indicates that they are optimistic on their company's outlook and may view the stock as undervalued.

We began by screening the biotech industry for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages, indicating that these stocks have strong upward momentum.

Insiders, naturally, work at the companies in question and have more knowledge about the firm than outsiders. When they put their own money on the line to purchase their company's shares it indicates they are bullish about the firm's future, and believe current share price is undervalued.

Interactive Chart: Press Play to compare changes in 1- year return over the last two years for the two stocks mentioned below.

Do you think these stocks are poised to outperform? Use this list as a starting point for your own analysis.

1. China Biologic Products, Inc. (NASDAQ:CBPO): Engages in the research, development, manufacturing, and sale of plasma-based pharmaceutical products. Market cap at $516.79M, most recent closing price at $19.45. Over the last six months, insiders were net buyers of 1,620,360 shares, which represents about 25.01% of the company's 6.48M share float.

The stock is currently trading 21.87% above its 20-day moving average, 42.36% above its 50-day moving average, and 89.86% above its 200-day moving average.

2. Halozyme Therapeutics, Inc. (NASDAQ:HALO): Engages in the development and commercialization of recombinant human enzymes that transiently modify tissue under the skin to facilitate injection of other therapies or correct diseased tissue structures for clinical benefits. Market cap at $940M, most recent closing price at $8.34. Over the last six months, insiders were net buyers of 1,307,690 shares, which represents about 2.11% of the company's 61.98M share float.

The stock is currently trading 22.46% above its 20-day moving average, 36% above its 50-day moving average, and 11% above its 200-day moving average.

3. Infinity Pharmaceuticals, Inc. (NASDAQ:INFI): Engages in the discovery and development of medicines for the treatment of cancer and other conditions in the United States. Market cap at $1.3B, most recent closing price at $32.93. Over the last six months, insiders were net buyers of 5,158,726 shares, which represents about 19.81% of the company's 26.04M share float.

The stock is currently trading 1.84% above its 20-day moving average, 25.7% above its 50-day moving average, and 79% above its 200-day moving average.

4. MannKind Corp. (NASDAQ:MNKD): Focuses on the discovery, development, and commercialization of therapeutic products for diabetes and cancer. Market cap at $611.99M, most recent closing price at $2.49. Over the last six months, insiders were net buyers of 31,269,350 shares, which represents about 33.24% of the company's 94.08M share float.

The stock is currently trading 10.26% above its 20-day moving average, 20.35% above its 50-day moving average, and 15.13% above its 200-day moving average.

*Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: 4 Rallying Biotech Stocks Being Snapped Up By Insiders