Interested in the high-growth prospects of the biotech industry? For a closer look at some interesting biotech stocks, we ran a screen.
We began by screening the biotech industry for stocks with strong liquidity, with current ratios above 3. The current ratio is current assets/current liabilities, so ratios above 3 indicate the company has at least 3 times the liquid assets to cover their short-term liabilities.
Then we screened for those with bullish sentiment from short sellers, with significant decreases in shares shorted month-over-month. This indicates that short sellers are less bearish on these names than they were a month ago.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
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Do you think these stocks are poised to move higher? 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. Spectrum Pharmaceuticals, Inc. (SPPI): A commercial-stage biotechnology company, primarily focuses on oncology and hematology. Market cap at $910.66M, most recent closing price at $15.30. Current ratio at 3.18. Shares shorted have decreased from 24.46M to 22.55M over the last month, a decrease which represents about 4.07% of the company's float of 46.93M shares. Days to cover ratio at 12.97 days.
2. Arena Pharmaceuticals, Inc. (ARNA): Focuses on discovering, developing, and commercializing oral drugs in the therapeutic areas of cardiovascular, central nervous system, inflammatory, and metabolic diseases. Market cap at $1.7B, most recent closing price at $9.33. Current ratio at 7.55. Shares shorted have decreased from 46.09M to 40.54M over the last month, a decrease which represents about 3.06% of the company's float of 181.41M shares. Days to cover ratio at 1.61 days.
3. Threshold Pharmaceuticals Inc. (THLD): Engages in the discovery and development of drugs targeting the microenvironment of solid tumors for patients living with cancer. Market cap at $392.95M, most recent closing price at $7.21. Current ratio at 5.79. Shares shorted have decreased from 8.42M to 7.27M over the last month, a decrease which represents about 2.82% of the company's float of 40.73M shares. Days to cover ratio at 5.35 days.
*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.