Do you like to follow smart money buying and selling trends? One group of smart money investors includes short sellers, who take positions that are profitable if a stock price falls.
We ran a screen on the biotech industry to find which stocks investors are selling short. We began by screening the biotech industry for stocks with high growth prospects, with 5-year projected EPS growth above 15%.
We then screened these names for those with bearish sentiment from short sellers, with significant increases in shares shorted month-over-month as a percent of share float. This indicates that short sellers are more bearish on these names than they were a month ago.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks will underperform like short sellers expect? Use this list as a starting point for your own analysis
1. Genomic Health Inc. (NASDAQ:GHDX): Focuses on the development and global commercialization of genomic-based clinical laboratory services that analyze the underlying biology of cancer allowing physicians and patients to make individualized treatment decisions. Market cap at $887.45M, most recent closing price at $28.86. Shares shorted have increased from 1.69M to 2.38M over the last month, an increase which represents about 4.33% of the company's float of 15.95M shares. Days to cover ratio at 8.87 days. Next 5-year EPS growth rate at 28.8%.
2. NPS Pharmaceuticals, Inc. (NASDAQ:NPSP): Engages in the development specialty therapeutics for gastrointestinal and endocrine disorders. Market cap at $778.98M, most recent closing price at $8.99. Shares shorted have increased from 8.57M to 10.28M over the last month, an increase which represents about 1.98% of the company's float of 86.38M shares. Days to cover ratio at 6.41 days. Next 5-year EPS growth rate at 23%.
3. Optimer Pharmaceuticals, Inc. (NASDAQ:OPTR): Focuses on discovering, developing, and commercializing hospital specialty products worldwide. Market cap at $483.1M, most recent closing price at $10.13. Shares shorted have increased from 8.07M to 8.95M over the last month, an increase which represents about 1.9% of the company's float of 46.29M shares. Days to cover ratio at 16.31 days. Next 5-year EPS growth rate at 17%.
*Short data sourced from Yahoo Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.