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Looking for hidden gems in the biotech industry? If you are, the following list might offer a good starting point for your own analysis.

To create this list, we started with a universe of rebounding biotech stocks. The stocks mentioned below are all trading far below their 200-day moving averages, but have recently rebounded above their short-term moving averages (specifically the 20-day moving average).

In addition, all of these stocks have seen significant institutional buying during the most recent quarter.

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.

Big money managers seem to think there's more upside to these rebounds--do you agree?

List sorted by relative size of recent institutional buying.

  1. Ventrus Biosciences Inc. (VTUS): A development stage specialty pharmaceutical company focuses on the development and commercialization of late-stage prescription drugs for gastrointestinal disorders; primarily hemorrhoids, anal fissures, and fecal incontinence. The stock is currently trading 3.32% above its 20-day SMA, and 30.26% below the 200-day SMA. Net institutional purchases in the current quarter reached 3.8M shares, which represents about 43.53% of the company's float of 8.73M shares.

  2. BG Medicine, Inc. (NASDAQ:BGMD): Engages in the discovery, development, and commercialization of diagnostic tests based on biomarkers in the United States. The stock is currently trading 9.10% above its 20-day SMA, and 20.49% below the 200-day SMA. Net institutional purchases in the current quarter reached 1.9M shares, which represents about 21.59% of the company's float of 8.80M shares.

  3. Amyris Biotechnologies Inc. (NASDAQ:AMRS): An integrated renewable products company, offers renewable compounds for a variety of markets. The stock is currently trading 4.92% above its 20-day SMA, and 45.30% below the 200-day SMA. Net institutional purchases in the current quarter reached 2.7M shares, which represents about 19.14% of the company's float of 14.11M shares.

  4. InterMune Inc. (NASDAQ:ITMN): Focuses on developing and commercializing therapies in pulmonology and hepatology. The stock is currently trading 9.09% above its 20-day SMA, and 48.77% below the 200-day SMA. Net institutional purchases in the current quarter reached 7.9M shares, which represents about 14.97% of the company's float of 52.77M shares.

  5. CardioNet, Inc. (NASDAQ:BEAT): Provides ambulatory, continuous, and real-time outpatient management solutions for monitoring relevant and timely clinical information regarding an individual's health in the United States. The stock is currently trading 4.36% above its 20-day SMA, and 36.11% below the 200-day SMA. Net institutional purchases in the current quarter reached 1.7M shares, which represents about 9.27% of the company's float of 18.33M shares.

  6. Savient Pharmaceuticals, Inc. (SVNT): Focuses on developing KRYSTEXXA, a biologic PEGylated uricase in the United States. The stock is currently trading 8.74% above its 20-day SMA, and 58.55% below the 200-day SMA. Net institutional purchases in the current quarter reached 5.1M shares, which represents about 9.2% of the company's float of 55.46M shares.

  7. Accuray Incorporated (NASDAQ:ARAY): Designs, develops, and sells the CyberKnife system, an image-guided robotic radiosurgery system used for the treatment of solid tumors. The stock is currently trading 3.63% above its 20-day SMA, and 28.15% below the 200-day SMA. Net institutional purchases in the current quarter reached 2.6M shares, which represents about 4.32% of the company's float of 60.16M shares.

  8. Healthways Inc. (NASDAQ:HWAY): Provides specialized, comprehensive solutions to assist people in maintaining or improving their health and well-being. The stock is currently trading 6.90% above its 20-day SMA, and 40.60% below the 200-day SMA. Net institutional purchases in the current quarter reached 1.2M shares, which represents about 3.76% of the company's float of 31.93M shares.

  9. PharmAthene, Inc. (NYSEMKT:PIP): Engages in the development and commercialization of medical countermeasures against biological and chemical weapons in the United States. The stock is currently trading 3.38% above its 20-day SMA, and 48.04% below the 200-day SMA. Net institutional purchases in the current quarter reached 1.5M shares, which represents about 3.75% of the company's float of 39.95M shares.

*Institutional data sourced from Fidelity, moving averages sourced from Finviz.

Source: Hedge Funds Love These 9 Rebounding Biotech Stocks