Below is a list of three biotech stocks that are oversold, with RSI (14) below 40. These three stocks have also seen, on average, more insider buying than insider selling over the last two years (excluding exercised options). For each company we'll list the average number of shares purchased by insiders on the open market over the last two years.
Insiders seem to be enthusiastic about the prospects of their employers. Do they know something we don't? Full details below.
Insider data sourced from Fidelity, RSI and all other data sourced from Finviz.
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. Note: The numbers on top of items represent the forward P/E ratio, if available.
List sorted by avg. insider shares purchased.
1. Seattle Genetics Inc. (NASDAQ:SGEN): Market cap of $1.45B. RSI(14) at 36.21. Insiders bought on average 2,360,235 shares over the last two years (2.33% of 101.38M shares outstanding).
The stock is a short squeeze candidate, with a short float at 13.69% (equivalent to 15.39 days of average volume). The stock has performed poorly over the last month, losing 10.18%.
Recent developments: Announced initiating a phase I clinical trial of brentuximab vedotin for treatment of lymphoma (Mar. 2011). Announced the company has submitted a Biologics License Application to the FDA for brentuximab vedotin (Feb. 2011).
2. MannKind Corp. (NASDAQ:MNKD): Market cap of $477.87M. RSI(14) at 33.45. Insiders bought on average 1,746,833 shares over the last two years (1.40% of 124.77M shares outstanding).
The stock has performed poorly over the last month, losing 28.01%.
Recent developments: Several law firms announced shareholder class action lawsuits against the company, claiming violations of the Securities Exchange Act of 1934 (Feb. 2011).
3. Theravance Inc. (THRX): Market cap of $1.56B. RSI(14) at 38.99. Insiders bought on average 61,022 shares over the last two years (0.08% of 73.46M shares outstanding).
Short float at 8.32% (equivalent to 11.6 days of average volume), implying THRX is a short squeeze candidate. It's been a rough couple of days for the stock, losing 8.88% over the last week.
Recent developments: Announced initiating a phase III trial of a once-daily LAMA/LABA dual bronchodilator to treat COPD (Feb. 2011). Announced beginning an extensive study to test the potential of drug Relovair to improve survival rates for patients with COPD (Feb. 2011).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.