Investing 101: Biotech Stocks With Insider Buying
Biotech stocks can provide sudden and magnificent returns, but they can be just as unforgiving. How can you decide which biotech stocks are worth investing in? We looked into it further.
We ran a screen of biotech stocks that are showing insider buying. If anyone knows what's going on with a company, it has to be the people who work there.
Many analysts follow insider buying trends exactly for that reason. Their transactions are closely monitored and can tell us a lot about where the business is heading.
Business section: investing ideas
If insiders are buying the stock of the biotech company they're working for, they have to either think that the stock is undervalued or that something big is going to happen, like a drug getting FDA approval.
The final list from our screen follows. It shows biotech companies with market caps over $300 million and insider buying over the past six months. Do you think the insiders know something nobody else does?
List sorted by market cap. (Access free, interactive tools to analyze these ideas.)
1. Incyte (NAS: INCY) : Focuses on the discovery and development of proprietary small-molecule drugs for hematologic and oncology indications, and inflammatory and autoimmune diseases. Market cap at $2.83 billion; most recent closing price at $23.14. Over the past six months, insiders were net buyers of 4,476,050 shares, which represents about 3.54% of the company's 126.59 million share float.
2. ViroPharma (NAS: VPHM) : Engages in the development and commercialization of products that address serious diseases, with a focus on products used by physician specialists or in hospital settings in the United States and internationally. Market cap at $1.4 billion; most recent closing price at $19.83. Over the past six months, insiders were net buyers of 2,020,227 shares, which represents about 3.22% of the company's 62.83 million share float.
3. Halozyme Therapeutics (NAS: HALO) : Engages in the development and commercialization of recombinant human enzymes that transiently modify tissue under the skin to facilitate injection of other therapies or correct diseased tissue structures for clinical benefits. Market cap at $813.37 million; most recent closing price at $7.53. Over the past six months, insiders were net buyers of 1,934,950 shares, which represents about 2.93% of the company's 66.14 million share float.
4. ZIOPHARM Oncology (NAS: ZIOP) : Focuses on the development and commercialization of in-licensed cancer drugs in North America. Market cap at $344.49 million; most recent closing price at $4.50. Over the past six months, insiders were net buyers of 1,351,460 shares, which represents about 2.4% of the company's 56.37 million share float.
5. QLT (NAS: QLTI) : Engages in the development and commercialization of therapies for the eye. Market cap at $323.28 million; most recent closing price at $6.70. Over the past six months, insiders were net buyers of 1,655,013 shares, which represents about 5.67% of the company's 29.19 million share float.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
At the time this article was published Disclosure: Kapitall's Danny Guttridge does not own any of the shares mentioned above. Insider data sourced from Yahoo! Finance; all other data sourced from Finviz. The Motley Fool has a disclosure policy.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.