The Institutional Money's #1 Biotech Stock

Follow the big money. Easy enough, right? Let’s highlight the benefits.

Large institutions have teams of analysts at their disposal. They also have access to corporate and market data that the typical retail investor couldn’t dream of having.

 

After institutions establish a position in a stock, their next goal is to promote and market the stock to drive interest in an attempt to boost the value of the share price. This is one of the main reasons why investors see so many analysts making the financial media rounds touting specific stock names.

 

Lastly, when large institutions acquire large positions in a company’s stock, they will do everything in their power to prevent a financial loss in that name. For example, they may have direct communication with the company's board of directors.

 

In short, investors who get in at or near the beginning of the institutional investor buying process stand to make a lot of money.

 

With all that being said, take a look at the chart of Kite Pharma, Inc. below.

Kite Pharma KITE operates a clinical-stage biopharmaceutical company that focuses on the development and commercialization of novel cancer immunotherapy products.

 

The key thing to note about Kite is its recent change in institutional ownership.

 

Quarter over quarter, Kite has seen a 65 percent increase in institutional ownership, and that’s tops in the entire biotech industry.

 

So, can there be a correlation between big money flow and stock price? In the case of Kite Pharma, it sure looks like it if you look at the chart above.

 

Since last quarter Kite has rallied from a low of around $21 per share to a recent high of almost $48. Certainly appears that the institutions are having an affect on Kite.

 

Obviously, investors must conduct their own due diligence before investing in any stock, but if the big money continues to flow into Kite the stock could see higher prices in the future.

 

Stocks considered in this review were confined to those over $5 per share that traded at least 500K shares a day based on a 90-day average.

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