Wish you could know what management really thought about their companies?
One great way for an inside look is to consider the stock buying trends of company insiders. Companies with significant net buying from their insiders (i.e. members of the board and upper management) are viewed favorably by analysts because the buying indicates that insiders who know more about their companies than anybody are bullish about their employers.
We ran a screen on the biotech industry for companies seeing the most significant net insider buying over the last six months.
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 these insiders on their companies? Use this list as a starting point for your own analysis.
List sorted by net insider purchases as a percent of share float.
1. Theravance Inc. (THRX): Engages in the discovery, development, and commercialization of small molecule medicines for various therapeutic areas, including respiratory disease, bacterial infections, and central nervous system (NYSE:CNS)/pain. Market cap of $1.99B. Net insider shares purchased over the last six months at 5.19M, which is 14.32% of the company's 36.24M share float. The stock is a short squeeze candidate, with a short float at 10.21% (equivalent to 17.05 days of average volume). The stock has lost 13.87% over the last year.
2. 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 $1.70B. Net insider shares purchased over the last six months at 87.52K, which is 0.38% of the company's 23.14M share float. Exhibiting strong upside momentum--currently trading 11.07% above its SMA20, 61.35% above its SMA50, and 116.9% above its SMA200. The stock has had a good month, gaining 20.65%.
3. Questcor Pharmaceuticals, Inc. (QCOR): Provides prescription drugs for central nervous system and inflammatory disorders. Market cap of $2.86B. Net insider shares purchased over the last six months at 181.88K, which is 0.33% of the company's 55.65M share float. Exhibiting strong upside momentum--currently trading 6.83% above its SMA20, 19.73% above its SMA50, and 71.12% above its SMA200. The stock has had a couple of great days, gaining 5.53% over the last week.
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.