If you consider yourself a contrarian investor, here are some ideas you may find interesting.
If you prefer to follow the trading activity of company insiders you may be interested in the following stock list.
We ran a screen on highly shorted stocks, which had an increase in short selling month over month equal to at least 2% of share float. Then we looked for bullish sentiment from company insiders, with significant net insider buying over the last six months equal to at least 2% of share float.
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.
Short sellers are pessimistic but insiders seem to think their companies offer good value at current levels - do you think these stocks will soon turn around? Use this list as a starting point for your own analysis.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
1. Molycorp, Inc. (MCP): Focuses on the production and sale of rare earth oxides from stockpiled feedstocks in the western hemisphere.
- Market cap at $954.21M, most recent closing price at $4.98
- Shares shorted have increased from 37.22M to 45.44M over the last month, an increase which represents about 6.11% of the company's float of 134.57M shares. Days to cover ratio at 5.78 days.
- Over the last six months, insiders were net buyers of 22,237,000 shares, which represents about 16.52% of the company's 134.57M share float. The 2 top holders of the stock are Molibdenos Y Metales S.A., and Bhappu Ross.
2. SandRidge Energy, Inc. (NYSE:SD): Operates as an independent natural gas and oil company in the United States.
- Market cap at $2.37B, most recent closing price at $4.84.
- Shares shorted have increased from 57.80M to 65.44M over the last month, an increase which represents about 2.54% of the company's float of 301.06M shares. Days to cover ratio at 5.94 days.
- Over the last six months, insiders were net buyers of 7,971,966 shares, which represents about 2.65% of the company's 301.07M share float. The 2 top holders of the stock are Fairfax Financial Holdings, and Riverstone/Carlyle Energy Partners.
3. XOMA Corporation (NASDAQ:XOMA): Engages in the discovery, development, and manufacture of therapeutic antibodies to treat inflammatory, autoimmune, infectious, and oncological diseases.
- Market cap at $283.48M, most recent closing price at $3.49.
- Shares shorted have increased from 6.25M to 8.74M over the last month, an increase which represents about 5.14% of the company's float of 48.40M shares. Days to cover ratio at 17.8 days.
- Over the last six months, insiders were net buyers of 4,722,670 shares, which represents about 9.76% of the company's 48.40M share float. The 2 top holders of the stock are Baker Brothers Life Sciences, and Baker Julian.
*EPS, short and insider data sourced from Yahoo! Finance, institutional data from Fidelity, 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 Rebecca Lipman, 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.