Biotech Stocks With Bullish Trends From Short Sellers
Written by Alexander Crawford:
Wish you could know what the market thought about a particular stock? One of the clearest sentiment indicators comes from short sellers. Changes in the number of shares shorted over time can give a clue as to whether investors are becoming more or less pessimistic about the name.
Shorting a share involves borrowing the share and immediately selling it with the agreement to buy it back and return it in the future. This is profitable if the share price drops, so short selling indicates a bearish (or pessimistic) view on the stock's prospects.
Therefore when a stock sees fewer shares shorted over time, it indicates greater optimism from investors. We ran a screen with this in mind, screening the biotech industry for stocks seeing significant decreases in shares shorted month-over-month.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.
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Below are the results of this screen. These biotech stocks have seen increasing bullishness from short sellers month-over-month.
Do you think these names are poised to outperform?
Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Ariad Pharmaceuticals Inc. (Nasdaq:ARIA): Focuses on the discovery, development, and commercialization of small-molecule drugs for the treatment of cancer. Shares shorted have decreased from 14.69M to 12.63M over the last month, a decrease which represents about 1.34% of the company's float of 153.21M shares
2. AVEO Pharmaceuticals, Inc. (Nasdaq:AVEO): Engages in the discovery and development of cancer therapeutics. Shares shorted have decreased from 2.62M to 2.11M over the last month, a decrease which represents about 1.47% of the company's float of 34.65M shares
3. Corcept Therapeutics Inc. (Nasdaq:CORT): Engages in the discovery and development of drugs for the treatment of severe metabolic and psychiatric disorders. Shares shorted have decreased from 4.62M to 3.35M over the last month, a decrease which represents about 2.69% of the company's float of 47.29M shares
4. Medivation, Inc. (Nasdaq:MDVN): Focuses on the development of small molecule drugs for the treatment of castration-resistant prostate cancer, Alzheimer's disease, and Huntington disease. Shares shorted have decreased from 2.88M to 2.49M over the last month, a decrease which represents about 1.45% of the company's float of 26.86M shares
5. Regeneron Pharmaceuticals, Inc. (Nasdaq:REGN): Develops, and commercializes pharmaceutical products for the treatment of serious medical conditions in the United States. Shares shorted have decreased from 6.66M to 5.16M over the last month, a decrease which represents about 2.1% of the company's float of 71.40M shares.
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Disclosure: Kapitall's Alexander Crawford does not own any of the shares mentioned above. Short data sourced from Yahoo! Finance.