Although there are no obvious catalysts which are driving up the share price of Accelerate Diagnostics Inc (NASDAQ:AXDX), the confidence of insiders and institutions is a strong buy signal. In the last few months, shares have already rallied 90% and the heavy insider buying suggests it can go even higher.
Lifevantage Corporation (NASDAQ:LFVN) is a biotech involved in the discovery, development, and commercialization of nutraceutica dietary supplements. In the last 6 months, the shares have appreciated 14% due to significant improvement in sales. This improvement is due to better marketing and sales effort behind the company’s primary product Protandim. The product is a daily dietary supplement that combats oxidate stress through Nrf2 activation. The United States anti-aging market is huge with only anti-aging skincare contributing $2.3 billion to sales.
The stock is currently trading at a forward P/E of 14x which is way below the industry average P/E. The sell side is expecting Lifevantage Corporation (NASDAQ:LFVN) to double its EPS within the next two years; from $0.09 (current year) to $0.18 (2014). Insiders and institutional investors also share this positive sentiment. During the last six months, Insiders have purchased approximately 43000 shares and institutional investors have added 1.4 million shares to their portfolio. The net addition of 1.4 million shares has increased institutional share holdings by mammoth 22%.
The street is expecting Lifevantage Corporation (NASDAQ:LFVN) to increase its EPS by 100% within the next couple of years. The market has still not realized the immense opportunity the company presents, and that is why the stock has moved up only 14%. Using a P/E of 24x and 2014 estimates of $0.18, we can set a $4.30 target on Lifevantage Corporation (NASDAQ:LFVN).
The three companies above have seen heavy insider trading during the last six months. The revenues of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) are on a massive decline, and while the market is pumping it on pipeline strength, insiders don’t agree. This lack of insider confidence on the pipeline makes Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) a terrific short target. Accelerate Diagnostics Inc (NASDAQ:AXDX) and Lifevantage Corporation (NASDAQ:LFVN) have both shown solid fundamental improvements. Insiders and institutions are also increasing their holdings, which is a bullish signal for investors.
The article Pharmaceuticals: 1 Short, 1 Buy, 1 Strong Buy originally appeared on Fool.com and is written by Mohsin Saeed.
Mohsin Saeed has no position in any stocks mentioned. The Motley Fool recommends Vertex Pharmaceuticals. Mohsin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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