Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

Do you prefer searching for undervalued stocks? One idea is to use analyst target prices as a proxy for fair value.

We ran a screen with this idea in mind. We began with stocks being favored by insiders, with significant net insider purchases over the last six months (representing at least 1% of share float).

Since most companies have only a few insiders, purchases representing 1% of share float give a big signal that insiders expect their employer to outperform.

We then screened these insider stock picks for those trading at the steepest discounts to even their lowest (most pessimistic) analyst target prices. For sufficient analyst coverage, we only included companies with at least 5 analyst ratings. This may indicate that these stocks are being undervalued.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

List sorted by net insider purchases over the last six months as a percent of share float.

1. Pacira Pharmaceuticals Inc. (NASDAQ:PCRX): Engages in the development, commercialization, and manufacture of pharmaceutical products for hospitals and ambulatory surgery centers. Market cap at $320.92M. Price at $10.24. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $12.00. This implies a current upside of 23.08% from current levels around $9.75. Over the last six months, insiders were net buyers of 689,481 shares, which represents about 4.43% of the company's 15.55M share float.

2. ZIOPHARM Oncology, Inc. (NASDAQ:ZIOP): Focuses on the development and commercialization of in-licensed cancer drugs in North America. Market cap at $240.37M. Price at $4.95. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $6.00. This implies a current upside of 21.95% from current levels around $4.92. Over the last six months, insiders were net buyers of 1,351,460 shares, which represents about 2.94% of the company's 45.93M share float.

3. Air Transport Services Group, Inc. (NASDAQ:ATSG): Provides aircraft, airline operations, and other related services primarily to the shipping and transportation industries. Market cap at $327.13M. Price at $5.16. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $7.00. This implies a current upside of 30.84% from current levels around $5.35. Over the last six months, insiders were net buyers of 1,186,000 shares, which represents about 2.54% of the company's 46.77M share float.

4. Synta Pharmaceuticals Corp. (NASDAQ:SNTA): Focuses on the discovery, development, and commercialization of small molecule drug candidates for treating severe medical conditions, including cancer and chronic inflammatory diseases. Market cap at $158.15M. Price at $4.09. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $5.00. This implies a current upside of 25.0% from current levels around $4.00. Over the last six months, insiders were net buyers of 507,059 shares, which represents about 1.76% of the company's 28.73M share float.

*Insider data sourced from Yahoo! Finance, target price data sourced from Thomson/First Call (via Yahoo! Finance), all other data sourced from Finviz.

Source: 4 Insider Stock Picks Deeply Discounted From Target Price