Insider Picks: 5 Biotech Stocks Being Snapped Up by Insider Executives

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Includes: CORT, GNOM, MNKD, SGEN, ZIOP
by: Kapitall

Looking into the biotech sector? With the complexity of information in this sector, as well as the inherent uncertainty of the FDA-approval process, one helpful way to gauge a company’s prospects is by looking at its insider buying activity.

To that end, we screened all biotech stocks for significant net insider buying within the last six months. The screen produced a list of five stocks, which are found below.

Are these insiders to be followed? Use this list as a starting-off point for your own analysis into the biotech sector.

List sorted by net insider purchases as a percent of share float.

1. Complete Genomics, Inc. (NASDAQ:GNOM): Market cap of $405.29M. Net insider purchases over the last six months at 1,650,000, which is 14.50% of a 11.38M share float. GNOM is exhibiting strong upside momentum -- currently trading 34.52% above its SMA20, 67.2% above its SMA50, and 82.41% above its SMA200. The stock has had a couple of great days, gaining 33.33% over the last week.

Recent Developments: Announced the company will be sequencing 615 complete human genome samples for the Institute of Systems Biology’s study on neurodegenerative diseases (Jan. 2011).

2. ZIOPHARM Oncology, Inc. (NASDAQ:ZIOP): Market cap of $309.33M. Net insider purchases over the last six months at 4,336,240, which is 13.37% of a 32.43M share float. The stock is a short squeeze candidate, with a short float at 8.86% (equivalent to 6.02 days of average volume). The stock has gained 7.6% over the last year.

Recent Developments: Announced completion of a public offering of 9.6M shares of common stock, with net proceeds of $59.4M (Feb. 2011).

3. MannKind Corp. (NASDAQ:MNKD): Market cap of $491.24M. Net insider purchases over the last six months at 3,478,136, which is 4.41% of a 78.95M share float. Short float at 27.63% (equivalent to 10.63 days of average volume), indicating the stock is a short squeeze candidate. The stock has lost 46.21% over the last year.

Recent Developments: Various law firms announced class action lawsuits against the company, alleging the company issued material misrepresentations concerning product candidate AFREZZA to the market, thereby inflating the company’s stock price (Feb. 2011).

4. Seattle Genetics Inc. (NASDAQ:SGEN): Market cap of $1.77B. Net insider purchases over the last six months at 1,475,000, which is 1.32% of a 111.88M share float. The stock is a short squeeze candidate, with a short float at 17.74% (equivalent to 16.16 days of average volume). The stock has gained 33.79% over the last year.

5. Corcept Therapeutics Inc. (NASDAQ:CORT): Market cap of $371.15M. Net insider purchases over the last six months at 556,900, which is 1.14% of a 48.85M share float. The stock has gained 47.33% over the last year.

*Insider purchases sourced from Yahoo! Finance, recent developments sourced from Reuters, 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.

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