Markets
OPK

OPK: Insiders vs. Shorts

The most recent short interest data was recently released for the 12/14/2018 settlement date, and OPKO Health Inc (Symbol: OPK) is one of the most shorted stocks of the Russell 3000, based on 14.80 "days to cover" versus the median component at 4.32. There are a number of ways to look at short data, but one metric that we find particularly useful is the "days to cover" because it considers both the total shares short and the average daily volume of shares typically traded. The number of shares short is then divided by the average daily volume, to express the total number of trading days it would take to close out all of the open short positions if every share traded represented a short position being closed.

In the case of OPKO Health Inc (Symbol: OPK), the total short interest at the 12/14/2018 settlement date was 62,293,145 shares, which compares to the average daily trading volume of just 4,208,433 shares, for a "days to cover" ratio of 14.80.

When short sellers eventually cover their positions, by definition there must be buying activity because a share that is currently sold short must be purchased to be covered. At the present levels of short interest, if from this point forward every single OPK share traded represented a short position being closed, then at the average daily volume of 4,208,433 shares it would only be during the 15th trading day that every short position would be closed.

So it would stand to reason that should some unexpectedly good news come out, and short sellers did not have 15 days of patience but instead wanted to cover their short positions very suddenly, that situation could result in sending the stock higher until the higher price produces enough sellers to generate the necessary volume to close out those positions quickly.

OPKO Health Inc (Symbol: OPK) has something relatively rare for a stock with this much short interest, that being insiders taking the other side of the trade. Looking back over the trailing six month period, OPK has seen 2 different instances of insider buying, as summarized by the table below:

Purchased Insider Title Shares Price/Share Value
07/03/2018 Phillip Frost, M.D et. al. CEO & Chairman 10,000 $4.75 $47,500.50
07/11/2018 Robert Scott Fishel Director 2,500 $6.00 $14,991.25
07/16/2018 Phillip Frost, M.D et. al. CEO & Chairman 15,000 $5.68 $85,248.50
07/18/2018 Phillip Frost, M.D et. al. CEO & Chairman 10,000 $6.05 $60,500.00
07/19/2018 Phillip Frost, M.D et. al. CEO & Chairman 10,000 $5.95 $59,500.00
07/20/2018 Phillip Frost, M.D et. al. CEO & Chairman 10,000 $5.89 $58,900.00
07/24/2018 Phillip Frost, M.D et. al. CEO & Chairman 55,000 $5.60 $307,769.26
07/25/2018 Phillip Frost, M.D et. al. CEO & Chairman 60,000 $5.47 $328,248.25
07/26/2018 Phillip Frost, M.D et. al. CEO & Chairman 90,000 $5.06 $455,205.62
08/09/2018 Phillip Frost, M.D et. al. CEO & Chairman 10,000 $5.45 $54,524.54
08/13/2018 Phillip Frost, M.D et. al. CEO & Chairman 15,000 $5.33 $79,931.92
08/17/2018 Phillip Frost, M.D et. al. CEO & Chairman 10,000 $5.54 $55,358.00
08/24/2018 Phillip Frost, M.D et. al. CEO & Chairman 15,000 $5.70 $85,553.47
08/28/2018 Phillip Frost, M.D et. al. CEO & Chairman 5,000 $5.80 $28,993.75
08/30/2018 Phillip Frost, M.D et. al. CEO & Chairman 5,000 $5.89 $29,475.00
09/05/2018 Phillip Frost, M.D et. al. CEO & Chairman 10,000 $5.79 $57,942.80
09/07/2018 Phillip Frost, M.D et. al. CEO & Chairman 10,000 $5.57 $55,704.71
09/07/2018 Robert Scott Fishel Director 10,000 $4.63 $46,300.00
12/28/2018 Phillip Frost, M.D et. al. CEO & Chairman 100,000 $3.13 $312,897.69

Below is a chart showing the "days to cover" for OPK over time:

Loading+chart++2018+TickerTech.com

And looking at the chart below, OPK's low point in its 52 week range is $2.335 per share, with $6.40 as the 52 week high point - that compares with a last trade of $2.87.

Mastercard Inc 200 Day Moving Average Chart

In recent trading, shares of OPKO Health Inc (Symbol: OPK) were changing hands at $2.87/share.

Ten Bargains You Can Buy Cheaper Than The Insiders Did »

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

OPK

Other Topics

Investing

Latest Markets Videos

    BNK Invest

    BNK Invest Inc. provides investment services and information. BNK Invest owns and operates a market news family of websites including DividendChannel, ETFChannel, StockOptionsChannel, and others, which make up an investor community featuring stock message boards, ratings, research, and strategies. BNK Invest caters to investing firms and individual investors internationally.

    Learn More