Saturday, December 22, 2012

Top 15 Most Undervalued Biotech Stocks By Analyst Target Price

The following is a list of the most undervalued biotech stocks, when comparing the current price against the average analyst target price (used as a proxy for fair value).

Although this is a crude way to find undervalued companies, our goal is to give you a starting point for your own analysis.

Analysts seem to think these stocks are deeply undervalued--what do you think? Full details below.

1. PROLOR Biotech, Inc. (PBTH): Biotechnology Industry. Market cap of $329.66M. Price at time of writing $6.13 vs. target price of $8.5 (potential upside of 38.66%). The stock has had a good month, gaining 16.92%.

2. Lexicon Pharmaceuticals, Inc. (LXRX): Biotechnology Industry. Market cap of $621.24M. Price at time of writing $1.81 vs. target price of $2.5 (potential upside of 38.12%). The stock is a short squeeze candidate, with a short float at 6.26% (equivalent to 9.42 days of average volume). The stock has had a couple of great days, gaining 9.52% over the last week.

3. Dendreon Corp. (DNDN): Biotechnology Industry. Market cap of $5.66B. Price at time of writing $39.18 vs. target price of $52.81 (potential upside of 34.79%). The stock has had a good month, gaining 20.73%.

4. Human Genome Sciences Inc. (HGSI): Biotechnology Industry. Market cap of $5.22B. Price at time of writing $27.9 vs. target price of $35.0 (potential upside of 25.45%). The stock is a short squeeze candidate, with a short float at 9.61% (equivalent to 5.95 days of average volume). The stock has lost 16.04% over the last year.

5. Targacept, Inc. (TRGT): Biotechnology Industry. Market cap of $720.57M. Price at time of writing $25.31 vs. target price of $31.5 (potential upside of 24.46%). This is a risky stock that is significantly more volatile than the overall market (beta = 3.11). It's been a rough couple of days for the stock, losing 6.62% over the last week.

6. Sequenom Inc. (SQNM): Biotechnology Industry. Market cap of $531.26M. Price at time of writing $6.89 vs. target price of $8.5 (potential upside of 23.37%). Relatively low correlation to the market (beta = 0.3), which may be appealing to risk averse investors. The stock is a short squeeze candidate, with a short float at 16.57% (equivalent to 6.49 days of average volume). The stock has had a couple of great days, gaining 9.78% over the last week.

7. Cadence Pharmaceuticals Inc. (CADX): Biotechnology Industry. Market cap of $563.93M. Price at time of writing $8.89 vs. target price of $10.9 (potential upside of 22.61%). The stock is a short squeeze candidate, with a short float at 23.88% (equivalent to 35.03 days of average volume). The stock has lost 3.56% over the last year.

8. Savient Pharmaceuticals, Inc. (SVNT): Biotechnology Industry. Market cap of $747.68M. Price at time of writing $10.54 vs. target price of $12.89 (potential upside of 22.3%). The stock has recently rebounded, and is currently trading 5.7% above its SMA20 and 7.08% above its SMA50. However, the stock still trades -20.96% below its SMA200. The stock has lost 27.24% over the last year.

9. Onyx Pharmaceuticals Inc. (ONXX): Biotechnology Industry. Market cap of $2.17B. Price at time of writing $34.07 vs. target price of $41.6 (potential upside of 22.1%). The stock is a short squeeze candidate, with a short float at 6.74% (equivalent to 7.46 days of average volume). The stock has gained 15.76% over the last year.

10. Amylin Pharmaceuticals, Inc. (AMLN): Biotechnology Industry. Market cap of $1.60B. Price at time of writing $11.19 vs. target price of $13.65 (potential upside of 21.98%). The stock is a short squeeze candidate, with a short float at 7.01% (equivalent to 5.16 days of average volume). The stock has lost 53.36% over the last year.

11. Emergent BioSolutions, Inc. (EBS): Biotechnology Industry. Market cap of $869.12M. Price at time of writing $24.7 vs. target price of $30.0 (potential upside of 21.46%). The stock has gained 51.13% over the last year.

12. Xenoport, Inc. (XNPT): Biotechnology Industry. Market cap of $351.19M. Price at time of writing $9.77 vs. target price of $11.86 (potential upside of 21.39%). Exhibiting strong upside momentum--currently trading 49.4% above its SMA20, 39.62% above its SMA50, and 34.11% above its SMA200. The stock has had a couple of great days, gaining 67.96% over the last week.

13. Spectrum Pharmaceuticals, Inc. (SPPI): Biotechnology Industry. Market cap of $473.20M. Price at time of writing $9.0 vs. target price of $10.92 (potential upside of 21.33%). The stock is a short squeeze candidate, with a short float at 10.55% (equivalent to 5.55 days of average volume). The stock has had a good month, gaining 31.88%.

14. Incyte Corporation (INCY): Biotechnology Industry. Market cap of $2.03B. Price at time of writing $16.95 vs. target price of $20.54 (potential upside of 21.18%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.38). The stock is a short squeeze candidate, with a short float at 10.42% (equivalent to 10.37 days of average volume).

15. Amgen Inc. (AMGN): Biotechnology Industry. Market cap of $50.32B. Price at time of writing $53.93 vs. target price of $64.92 (potential upside of 20.38%). The stock has lost 11.38% over the last year.

*All data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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