Are Short Sellers On to Something at Navidea Biopharmaceuticals Inc (NAVB)? – Cardinal Health, Inc. (CAH)

Page 1 of 2

Since everyone loves a winner, it’s reasonable to assume that everyone hates a loser — everyone but short sellers, at least. These contrarian investors bet that hot stocks are primed to fall, aiming to turn their pessimism into profits.

Below, we take a look at biotech Navidea Biopharmaceuticals Inc (NYSEAMEX:NAVB), whose shares sold short, according to The Wall Street Journal, jumped 6%. That amounts to more than 17% of its float so its short interest ratio is 18 days to cover, or the number of days it would take to completely buy back all the shares sold short. The Motley Fool thinks seven days is a lot so it’s always possible we could see a short squeeze, but let’s see if the specialty pharma still has the power to make short work of short sellers.

Navidea Biopharmaceuticals snapshot

Market Cap $361 million
Revenues (TTM) >$1 million
1-Year Stock Return 4.7%
Estimated 5-Year EPS Growth N/A
Return on Investment (164.8%)
Dividend and Yield N/A
Recent Price $3.15
Shares Short Feb. 15 19.3 million
Shares Short Jan. 31 18.2 million
% Change 6.2%
CAPS Rating **

Sources: wsj.com, FinViz.com. N/A = not available; Navidea does not pay a dividend.

Just because the shorts are piling in doesn’t mean you should, too. Such stocks could have serious problems that warrant their short interest, but they might also just be stricken by short-term troubles. Only Foolish due diligence will tell you for certain.

Cardinal Health, Inc.The short story
Navidea Biopharmaceuticals Inc (NYSEAMEX:NAVB)’s lead product is Lymphoseek, a marker used to determine the spread of certain solid-tumor cancers into the lymphatic system, which has the potential to be a top-tier targeted imaging agent for lymphatic mapping. Following the disappointment associated with receiving a complete response letter from the FDA last September, Navidea finally has a PDUFA date at the end of next month that should determine once and for all whether it has addressed the regulatory agency’s concerns.

Fortunately, those issues centered on its contract manufacturing partners and not the imaging agent’s efficacy or safety, so considering it also filed a marketing authorization application with the European EMA, there might be some sense behind investors feeling confident that it has.

If the FDA does give Lymphoseek its imprimatur, Navidea and its U.S. marketing partner, Cardinal Health, Inc. (NYSE:CAH), plan to hit the ground running. There’s a worldwide market opportunity approaching $450 million, depending on who’s doing the counting, with the U.S. representing almost half of it at $200 million. The EU is second with $70 million, according to Navidea, and the rest of the world comes in at $180 million.

Of course, Navidea Biopharmaceuticals Inc (NYSEAMEX:NAVB) won’t recognize all that revenue because that’s just the addressable market. It’s going to have to split the proceeds with Cardinal Health, Inc. (NYSE:CAH), which also has the responsibility for determining what price to sell the agent (analysts have pegged it at around $400 per treatment ). As they’re also entitled to half the U.S. sales, it’s going to be a much smaller number that ends up on Navidea’s top line. Short sellers may agree there’s an opportunity here, but it’s likely a far smaller one than longs are suggesting.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!