Health and Healthcare

Huge PowerShares ETF Rebalance Means Massive Buying for 4 Biotech Stocks

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On the close Tuesday, the PowerShares Dynamic exchange traded funds (ETFs) are set for a rebalance. What this means is the 15 individual ETFs in the Dynamic family will be rebalanced to reflect reweighting allocations across the stocks that make up the various portfolios. It also means there will be some serious buying and selling on the last print Tuesday.

The PowerShares Dynamic family of ETFs seek investment results that correspond to the price and yield of the Intellidex indexes, which are fundamentally weighted. In a research note, the analysts at Cowen have calculated the buys and sell in the various portfolios, and we found four stocks that are expected to have huge buying on the close Tuesday.

Geron

This stock will see an incredible volume buy on the close. The Cowen team expects that 2,645,600 shares of Geron Corp. (NASDAQ: GERN) will be purchased. That will represent a huge 140% increase in volume over the 10-day average trading volume percentage.

Geron is a clinical stage biopharmaceutical company focused on the collaborative development of a first-in-class telomerase inhibitor, imetelstat, in hematologic myeloid malignancies.

The Thomson/First Call consensus price target for the stock is $5.75. Shares closed most recently at $5.10.

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Novavax

This very hot biotech stock and will see significant buying on the close. Cowen thinks that a whopping 3,226,600 of Novavax Inc. (NASDAQ: NVAX) shares will be bought. That represents an 80% increase in volume over the 10-day average.

This clinical-stage vaccine company delivers novel products to prevent a broad range of infectious diseases. Novavax’s recombinant nanoparticles and Matrix-M adjuvant technology are the self-described foundation for groundbreaking innovation that improves global health through safe and effective vaccines.

The consensus price target for Novavax is a massive $16.35. The stock closed Monday at $8.56 per share.
Exelixis

Exelixis Inc. (NASDAQ: EXEL) is a biopharmaceutical company committed to developing small molecule therapies for the treatment of cancer. Exelixis is focusing its development and commercialization efforts primarily on cabozantinib, its wholly owned inhibitor of multiple receptor tyrosine kinases. Positive results were recently announced for a Phase 3 pivotal trial of cabozantinib in patients with advanced renal cell carcinoma. The company recently announced FDA approval for a drug that can help delay the progression of advanced melanoma.

The Cowen team expects a block of 2,184,200 shares will be purchased on the close Tuesday, which represents a 61% increase over the 10-day average volume.

The consensus price target for Exelixis is $6. The stock closed Monday at $5.72.

MannKind

MannKind Corp. (NASDAQ: MNKD) focuses on the discovery and development of therapeutic products for patients with diseases such as diabetes, and Cowen thinks it will see a massive buy of 2,405,300 shares of stock. That represents 41% of the 10-day average trading volume.

The company has been an incredibly volatile stock over the past few years. MannKind has launched its inhalable insulin product, which was on the burner seemingly forever.

The consensus price target is set at $4.67. MannKind shares closed trading on Monday at $2.

ALSO READ: 4 Deutsche Bank Top Pick Energy Stocks to Buy on Big Oil Pullback

We like to remind our readers that these transactions are hardly a well-kept secret, and many managers that shadow the ETFs are already putting on trades in front of the action. However, if you are looking to buy or sell these companies, the added liquidity on the close could be helpful. Investors should note that these are all very high-risk stocks that are only appropriate for aggressive trading accounts.

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