Wish you could get an inside peak at your favorite companies? One way is to look at insider stock buying trends, which can indicate how a company's employees view their employer's prospects.
We ran a screen with this idea in mind, beginning with the healthcare sector. We screened US-traded healthcare stocks for those outperforming the market, with performance over the last quarter above 20%.
We then screened for those with the support of their insiders - that is, members of the board and upper management - seeing significant net insider purchases over the last six months (representing at least 1% of share float).
Since most companies have only a small group of insiders, net purchases representing 1% of share float is a substantial show of confidence in the company's prospects.
Interactive Chart: Press Play to compare changes in market cap 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.
Do you think these stocks will outperform like their insiders expect? Use this list as a starting point for your own analysis.
List sorted by net insider purchases as a percent of share float.
1. Agenus Inc. (AGEN): Develops and commercializes immunotherapies for cancer and infectious diseases. Market cap at $142.14M. Price at $6.23. Performance over the last quarter at 156.91%. Over the last six months, insiders were net buyers of 2,144,705 shares, which represents about 10.72% of the company's 20.01M share float.
2. Pacira Pharmaceuticals Inc. (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. Performance over the last quarter at 20.61%. 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.
3. Pharmacyclics Inc. (PCYC): Operates as a clinical-stage biopharmaceutical company focusing on developing and commercializing small-molecule drugs for the treatment of immune mediated disease and cancer. Market cap at $1.84B. Price at $26.46. Performance over the last quarter at 65.68%. Over the last six months, insiders were net buyers of 1,340,060 shares, which represents about 2.47% of the company's 54.27M share float.
4. Endocyte, Inc. (ECYT): Engages in developing targeted therapies for the treatment of cancer and inflammatory diseases. Market cap at $276.66M. Price at $7.40. Performance over the last quarter at 122.13%. Over the last six months, insiders were net buyers of 666,000 shares, which represents about 2.58% of the company's 25.86M share float.
5. LHC Group, Inc. (LHCG): Provides post-acute healthcare services primarily to Medicare beneficiaries in rural markets in the United States. Market cap at $327.66M. Price at $17.46. Performance over the last quarter at 24.27%. Over the last six months, insiders were net buyers of 196,950 shares, which represents about 1.44% of the company's 13.68M share float.
6. Skilled Healthcare Group, Inc. (SKH): Operates skilled nursing facilities, assisted living facilities, hospices, home health providers, and a rehabilitation therapy business. Market cap at $273.04M. Price at $7.20. Performance over the last quarter at 31.30%. Over the last six months, insiders were net buyers of 261,800 shares, which represents about 1.31% of the company's 19.93M share float.
*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.
