There are many sources to find out what analysts or traders predict the direction of stocks to be, but one of the most interesting is shares shorted.
Shorting a share indicates a specific prediction that the stock’s price will soon fall, and because shorting requires significant amounts of borrowing, short sellers are given background checks to trade and are generally considered “smart money” investors.
We ran a screen on the biotech industry for stocks seeing bearish sentiment from short sellers, with significant increases in shares shorted month-over-month.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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.
Short sellers believe these stocks will soon underperform - do you agree? 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. Amyris, Inc. (AMRS): An integrated renewable products company, offers renewable compounds for a variety of markets. Market cap of $481.46M. Shares shorted have increased from 4.93M to 5.51M month-over-month, a change representing 4.11% of the company's 14.11M share float. The stock is a short squeeze candidate, with a short float at 15.89% (equivalent to 20.03 days of average volume). The stock has performed poorly over the last month, losing 14.96%.
2. Oncothyreon Inc (ONTY): Focuses on the development of therapeutic products for the treatment of cancer. Market cap of $320.53M. Shares shorted have increased from 9.54M to 10.29M month-over-month, a change representing 2.02% of the company's 37.06M share float. The stock is a short squeeze candidate, with a short float at 24.19% (equivalent to 16.75 days of average volume). It's been a rough couple of days for the stock, losing 7.4% over the last week. The stock has had a good month, gaining 17.16%.
3. Targacept, Inc. (TRGT): Engages in the design, discovery, and development of novel Neuronal Nicotinic Receptors (NNR) Therapeutics for the treatment of diseases and disorders of the central nervous system. Market cap of $258.03M. Shares shorted have increased from 3.68M to 4.25M month-over-month, a change representing 1.98% of the company's 28.78M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.02). The stock has had a couple of great days, gaining 6.47% over the last week.
4. Sequenom Inc. (SQNM): Provides products, services, diagnostic testing, applications, and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural and livestock research. Market cap of $364.58M. Shares shorted have increased from 21.27M to 23.09M month-over-month, a change representing 1.95% of the company's 93.27M share float. The stock is a short squeeze candidate, with a short float at 23.36% (equivalent to 9.37 days of average volume). The stock has performed poorly over the last month, losing 14.05%.
5. Incyte Corporation (INCY): Focuses on the discovery and development of proprietary small molecule drugs for hematologic and oncology indications, and inflammatory and autoimmune diseases. Market cap of $1.70B. Shares shorted have increased from 15.80M to 17.87M month-over-month, a change representing 1.66% of the company's 124.81M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock is a short squeeze candidate, with a short float at 14.31% (equivalent to 8.71 days of average volume). The stock has lost 12.69% over the last year.
6. Exelixis, Inc. (EXEL): Engages in the discovery, development, and commercialization of small molecule drugs for the treatment of cancer, metabolic, and cardiovascular disorders. Market cap of $534.32M. Shares shorted have increased from 13.19M to 14.90M month-over-month, a change representing 1.34% of the company's 127.99M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.04). The stock is a short squeeze candidate, with a short float at 11.78% (equivalent to 8.14 days of average volume). The stock has lost 49.82% over the last year.
7. Idenix Pharmaceuticals Inc. (IDIX): Engages in the discovery and development of drugs for the treatment of human viral and other infectious diseases in the United States and Europe. Market cap of $819.07M. Shares shorted have increased from 5.21M to 6.01M month-over-month, a change representing 1.26% of the company's 63.49M share float. The stock is a short squeeze candidate, with a short float at 8.6% (equivalent to 7.44 days of average volume). The stock has gained 62.34% over the last year.
8. BioSpecifics Technologies Corp. (BSTC): Involves in the development of an injectable collagenase for various indications. Market cap of $106.40M. Shares shorted have increased from 203.84K to 254.42K month-over-month, a change representing 1.24% of the company's 4.08M share float. The stock is a short squeeze candidate, with a short float at 6.99% (equivalent to 19.33 days of average volume).The stock has lost 34.26% over the last year.
9. Cerus Corporation (CERS): Engages in the development and commercialization of the INTERCEPT Blood System. Market cap of $144.30M. Shares shorted have increased from 7.20M to 7.74M month-over-month, a change representing 1.16% of the company's 46.63M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.26). The stock is a short squeeze candidate, with a short float at 16.59% (equivalent to 18.26 days of average volume). The stock has gained 31% over the last year.
10. 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 (CNS)/pain. Market cap of $1.88B. Shares shorted have increased from 6.38M to 6.76M month-over-month, a change representing 1.05% of the company's 36.24M share float. The stock is a short squeeze candidate, with a short float at 10.21% (equivalent to 17.64 days of average volume). The stock has lost 21.09% over the last year.
*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.
