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.
Tool provided by Kapitall. More investing ideas on Kapitall Wire.
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.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.