Do you like to follow the buying and selling trends of smart money investors? If so, we ran a screen that you may be interested in.
We began by screening the healthcare sector for stocks that appear undervalued relative to earnings growth, with PEG below 1.
Then we screened for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform into the future.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall (kapitall.com).
Do you agree with hedge funds on these names? Use this list as a starting point for your own analysis.
List sorted by net institutional purchases as a percent of share float.
1. Neurocrine Biosciences Inc. (NBIX): Engages in the discovery, development, and commercialization of drugs for the treatment of neurological and endocrine-related diseases and disorders in the United States. Market cap at $511.91M, most recent closing price at $7.72. PEG at 0.19. Net institutional purchases in the current quarter at 11.8M shares, which represents about 20.21% of the company's float of 58.38M shares.
2. Akorn, Inc. (AKRX): Engages in the manufacture and marketing of diagnostic and therapeutic pharmaceutical products, hospital drugs, and injectable pharmaceuticals in the United States and internationally. Market cap at $1.42B, most recent closing price at $14.90. PEG at 0.76. Net institutional purchases in the current quarter at 9.7M shares, which represents about 13.83% of the company's float of 70.12M shares.
3. Pernix Therapeutics Holdings, Inc. (PTX): Engages in the development, marketing, and sale of branded and generic pharmaceutical products primarily for the pediatric market. Market cap at $232.56M, most recent closing price at $8.0. PEG at 0.6. Net institutional purchases in the current quarter at 631.7K shares, which represents about 13.11% of the company's float of 4.82M shares.
4. Sun Healthcare Group, Inc. (SUNH): Provides health care services primarily for senior population in the United States. Market cap at $624.58M, most recent closing price at $8.35. PEG at 0.95. Net institutional purchases in the current quarter at 1.4M shares, which represents about 6.86% of the company's float of 20.42M shares.
5. DUSA Pharmaceuticals Inc. (DUSA-OLD): Develops and markets Levulan photodynamic therapy (PDT) and other products for common skin conditions primarily in the United States, Canada, and Korea. Market cap at $145.59M, most recent closing price at $5.84. PEG at 0.83. Net institutional purchases in the current quarter at 1.1M shares, which represents about 5.51% of the company's float of 19.95M shares.
*Institutional data sourced from Fidelity, 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.