Healthcare companies, especially pharmaceuticals, medical devices, and biotech companies, often experience discrete sudden share movements due to unexpected events such as FDA drug approval or rejection, positive or negative results from drug tests, etc. Barring FDA officials, who else has the best information about these events? Insiders, especially executives and directors of the companies.
It, therefore, can very lucrative to track insider activities in this industry. Moreover, since many biotech companies are not yet making money, the financial records are less diagnostic than events and technical indicators. This week, we track the following companies with insider purchases:
Celgene Corporation (CELG) is a biotechnology company. It has a market cap of $28.26 billion. Its stock closed at $64.16 per share on Friday. Over the past week, Celgene had one insider who bought a total of 600 shares at the total value of $36,174. Celgene has an enterprise value / EBITDA ratio of 13.18. Its profit margin was 29.34% over the past year.
I like Celgene's operating margin of 33.53%, a good sign for the company's financial health. The company had a net income of $1.46 billion and EBITDA of $2.01 billion on revenue of $4.99 billion. Both its revenue and earnings grew in double digits over the latest quarter, by 13.20% and 57.10%, respectively. Its operating cash flow is $1.84 billion, and its free cash flow is $1.39 billion. The trading volume has been stable recently. This is a large pharma with solid financials, I do not expect drastic changes albeit insider activity.
CytRx Corporation (CYTR) is a biotechnology company. It has a market cap of $97.11 million. Its stock closed at $4.58 per share on Friday. Over the past week, CytRx had one insider who bought a total of 67,993 shares at the total value of $347,714. The company is currently losing money operationally. Its business has to turnaround for the situation to become more positive.
The company had a net income of $-18.28 million and EBITDA of $-22.00 million on revenue of $0.25 million. The company has $31.98 million cash on its balance sheet, which means it may not have raise cash soon. This month, 1.76 million shares are being shorted. Comparing to 1.25 million shares shorted over the previous month, the shared short has increased by 40%. The short ratio of CytRx is 5.10, accounting for 8.60% of floating shares. CytRx has a couple of phase Ib-II testing drugs for lung related diseases.
Daxor Corp. (DXR) is a medical instruments & supplies company. It has a market cap of $37.18 million. Its stock closed at $8.86 per share on Friday. Over the past week, Daxor had one insider who bought a total of 111 shares at the total value of $982. Its price is near the bottom, at around 0.11% off its 52-week low. Its price/book ratio is 1.03. The company is currently losing money operationally.
The company had a net income of $-7.19 million and EBITDA of $-5.50 million on revenue of $1.45 million. The company has $55.86 million cash on its balance sheet. Its debt burden is $14.05 million. Since it is burning cash very slowly, Daxor is financially stable for the time being.
GenMark Diagnostics, Inc. (GNMK) is a medical appliances & equipment company. It has a market cap of $91.72 million. Its stock closed at $4.34 per share on Friday. Over the past week, GenMark Diagnostics Inc. had 8 insiders who bought a total of 205,715 shares at the total value of $864,003. Multiple insider sales occasions are usually a negative sign. One concern is the company isn't profitable at this point.
The company had EBITDA of $-21.40 million on revenue of $6.41 million. The company has $23.94 million cash on its balance sheet. Its debt burden is $1.42 million. This is another company that has to raise more cash within a year.
Rockwell Medical Technologies Inc. (RMTI) is a medical appliances & equipment company. It has a market cap of $194.18 million. Its stock closed at $9.31 per share on Friday. Over the past week, Rockwell Medical Technologies Inc. had one insider who bought a total of 5,000 shares at the total value of $42,650. The company isn't profitable at this point. Its EBITDA was $-28.24 million on revenue of $47.70 million.
The company has $25.55 million cash on its balance sheet. Over the past ten days, Rockwell Medical Technologies Inc. has seen significantly higher than average trading volume. This month, 1.96 million shares are being shorted. The short ratio of Rockwell Medical Technologies Inc. is 25.40, accounting for 11.80% of floating shares.
Vision-Sciences Inc. (VSCI) is a medical appliances & equipment company. It has a market cap of $67.62 million. Its stock closed at $1.50 per share on Friday. Over the past week, Vision-Sciences Inc. had one insider who bought a total of 10,000 shares at the total value of $15,089. The company had EBITDA of $-9.28 million on revenue of $16.69 million.
The company has $2.67 million cash on its balance sheet. Its debt burden is $10.19 million, or approximately in debt/equity ratio. It looks quite bad financially and some kind of cash raising activity is imminent. Thinning trading volume suggests that trading interest in the company is waning.
Source of business information: Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
