Looking for healthcare industry stocks currently selling at prices many analysts consider a bargain? You're not alone, institutional buyers are snapping up these biotechnology companies trading below predicted rates.
To create the list below we first screened for stocks selling at prices below analysts targets, limiting our universe to biotechnology companies that imply a potential upside of at least 15% based on the lowest target price. This provides an educated guess on how high a stock could go in the near future.
We use the lowest target price because analyst prices tend to be inflated. In addition, we only focused on companies that have more than 5 analyst target prices to make sure we have decent coverage.
Next we looked for bullish sentiments from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that hedge fund managers and mutual fund managers expect upside, and that these stocks could prove the analyst targets are correct.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Do you agree with the bets these institutional investors are making? Use this list as a starting point for your own analysis.
1. Questcor Pharmaceuticals, Inc. (QCOR): Provides prescription drugs for central nervous system and inflammatory disorders.
- Market cap at $1.77B, most recent closing price at $29.72.
- Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $38. This implies a potential upside of 29.78% from current levels around $29.28.
- Net institutional purchases in the current quarter at 4.1M shares, which represents about 8.48% of the company's float of 48.35M shares.
- The top three holders of the stock are FMR LLC, Deerfield Management and The Vanguard Group, Inc.
2. BioDelivery Sciences International, Inc. (NASDAQ:BDSI): Focuses on developing and commercializing products in the areas of pain management and oncology supportive care.
- Market cap at $203.52M, most recent closing price at $5.43.
- Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $7. This implies a potential upside of 29.63% from current levels around $5.4.
- Net institutional purchases in the current quarter at 8.7M shares, which represents about 33.77% of the company's float of 25.76M shares.
- The top three holders of the stock are FMR LLC, Adage Capital Partners GP LLC and Sophrosyne Capital LLC.
3. Novavax, Inc. (NASDAQ:NVAX): Engages in developing recombinant vaccines for infectious diseases using its virus-like particle platform technology.
- Market cap at $366.89M, most recent closing price at $2.48.
- Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $3. This implies a potential upside of 20.48% from current levels around $2.49.
- Net institutional purchases in the current quarter at 8.8M shares, which represents about 7.33% of the company's float of 119.98M shares.
- The top three holders of the stock are FMR LLC, RA Capital Management, LLC and BlackRock Fund Advisors.
* Institutional data sourced from Fidelity, target price data sourced from Thomson/First Call (via 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 Emily Smykal, 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.