For a gauge of what the market thinks about a stock, look to shares shorted. Short sellers circle around a stock when they believe its stock price will soon fall. In the same way, stocks with decreasing shares shorted are being seen more positively by short sellers.
We ran a screen on the healthcare industry for stocks rallying above their 20-day, 50-day, and 200-day moving averages. We screened these stocks for those with bullish trends from short sellers, seeing significant decreases in shares shorted month-over-month.
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.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you agree with short sellers’ optimism for these names? Use this list as a starting point for your own analysis.
List sorted by decrease in shares shorted as a percent of share float.
1. Questcor Pharmaceuticals, Inc. (QCOR): Provides prescription drugs for central nervous system and inflammatory disorders. Market cap of $2.59B. The stock is currently trading at 1.89% above its 20-Day SMA, 22.61% above its 50-Day SMA, and 68.53% above its 200-Day SMA. Shares shorted have decreased from 5.99M to 4.93M month-over-month, a change representing 1.90% of the company's 55.65M share float. The stock has had a good month, gaining 20.46%.
2. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN): Develops and commercializes biopharmaceuticals for serious diseases and medical conditions. Market cap of $3.56B. The stock is currently trading at 0.90% above its 20-Day SMA, 1.16% above its 50-Day SMA, and 15.66% above its 200-Day SMA. Shares shorted have decreased from 9.62M to 7.81M month-over-month, a change representing 1.59% of the company's 113.78M share float. The stock is a short squeeze candidate, with a short float at 6.85% (equivalent to 8.22 days of average volume). The stock has gained 15.77% over the last year.
3. Medivation, Inc. (NASDAQ:MDVN): Focuses on the development of small molecule drugs for the treatment of castration-resistant prostate cancer, Alzheimer's disease, and Huntington disease. Market cap of $1.49B. The stock is currently trading at 30.92% above its 20-Day SMA, 81.36% above its 50-Day SMA, and 107.21% above its 200-Day SMA. Shares shorted have decreased from 2.68M to 2.32M month-over-month, a change representing 1.56% of the company's 23.14M share float. The stock has had a good month, gaining 142.24%.
*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.