Do you consider yourself a contrarian investor? If so, we have just the list for you.
We began by screening the biotech industry for stocks with bearish sentiment from short sellers, with float shorts above 10%.
We then screened these names for those with the confidence of their company insiders, such as members of the board and upper management, with significant net insider purchases over the last six months representing at least 2% of share float. Since most companies only have a handful of company insiders, net insider purchases representing 2% of share float is a big show of confidence in their employer's prospects.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Do you think these insiders are calling it right? Use this list as a starting point for your own analysis.
1. Opko Health, Inc. (NYSEMKT:OPK): Engages in the discovery, development, and commercialization of novel and proprietary technologies primarily in the United States, Chile, and Mexico. Market cap at $1.8B, most recent closing price at $6.05. Over the last six months, insiders were net buyers of 6,485,900 shares, which represents about 4.86% of the company's 133.33M share float. Float short at 18%. The 2 top holders are Phillip Frost, and Jane Hsiao
2. Repros Therapeutics Inc. (NASDAQ:RPRX): Focuses on the development of oral small molecule drugs for major unmet medical needs. Market cap at $309.7M, most recent closing price at $18.09. Over the last six months, insiders were net buyers of 557,500 shares, which represents about 4.53% of the company's 12.30M share float. Float Short at 12.7%. The top 2 holders of the stock are Michael Oliveira, and Joseph Podolski. Additionally, Perceptive Advisors holds 10% of the stock.
3. Synta Pharmaceuticals Corp. (SNTA): Focuses on the discovery, development, and commercialization of small molecule drug candidates for treating severe medical conditions, including cancer and chronic inflammatory diseases. Market cap at $739.77M, most recent closing price at $10.74. Over the last six months, insiders were net buyers of 1,058,660 shares, which represents about 3.08% of the company's 34.32M share float. Float short at 17.6%. The 2 top holders of the stock are Bruce Kovner, and Safi Bahcall.
*Insider 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.