Find A Biotech Stock That's On A Winning Streak

Written by Alexander Crawford

Do you like to invest with a stock's momentum trends? One idea is to find stocks on winning streaks relative to a market index such as the S&P 500.

To find stocks on winning streaks, we ran a screen beginning with those stocks seeing a persistence of days in which the stock beat the S&P 500 and little persistence of days in which it underperformed the S&P 500. We measured this by the ratio of days of its longest winning streak over the past month over the number of days of its longest losing streak.

Investors follow momentum trends because as information moves throughout the market, positive sentiment on a company can cause momentum to persist, although this does not always happen.

Interactive Chart: Use the Compar-O-Matic to compare market caps for the stocks mentioned below:



Business Section: Investing Ideas
The results of this screen are below - these biotech stocks have seen a high persistence of days in beating the S&P 500 over the last month, and little persistence of days in underperforming the S&P 500 over the same period.

Do you think these stocks will continue to see upward momentum?

Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)

1. AVI Biopharma, Inc. (Nasdaq:AVII): Focuses on the discovery and development of RNA-based therapeutics for the treatment of rare and infectious diseases. The stock's average daily alpha versus the S&P500 index stands at 2.11% (measured close to close, over the last month). During this period, the longest winning streak lasted nine days (i.e., the stock's daily returns outperformed the S&P 500 for 9 consecutive days). The longest losing streak lasted three days (i.e., a win or losing streak ratio of three).

2. BioCryst Pharmaceuticals, Inc. (Nasdaq:BCRX): Designs, optimizes and develops small-molecule pharmaceuticals that block key enzymes involved in infectious diseases, cancer and inflammatory diseases. The stock's average daily alpha versus the S&P500 index stands at 0.86% (measured close to close, over the last month). During this period, the longest winning streak lasted six days (i.e., the stock's daily returns outperformed the S&P 500 for six consecutive days). The longest losing streak lasted two days (i.e., a win or losing streak ratio of three).

3. Infinity Pharmaceuticals, Inc. (Nasdaq:INFI): Engages in the discovery and development of medicines for the treatment of cancer and other conditions in the United States. The stock's average daily alpha versus the S&P 500 index stands at 2.35% (measured close to close, over the last month). During this period, the longest winning streak lasted four days (i.e., the stock's daily returns outperformed the S&P 500 for four consecutive days). The longest losing streak lasted one day (i.e., a win or losing streak ratio of four).

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Kapitall's Alexander Crawford does not own any of the shares mentioned above. Price data sourced from Yahoo! Finance.