Shares in Polynovo Ltd (ASX: PNV) were 7% higher in early trading today but have since resettled at $1.16, up 2.67% despite no market-sensitive information being released by the medical device company today.
Polynovo shares have risen from the dead, having spiked in a vertical fashion by 35.1% in the past five trading days. This has potentially ended a downwards trend that began at the start of FY22 when the Polynovo shares were trading at $2.82.
The Polynovo share price has also bifurcated away from the S&P/ASX 200 Health Care Index (ASX: XHJ). Over the past five trading days, the broader index gained just 0.6%.
What's up with the Polynovo share price?
Recently, share purchases by various insiders have made the news.
As we reported on Tuesday: "An entity owned by the company's chair David Williams splashed out yesterday, snapping up $227,500 worth of Polynovo stock on the market. Additionally, another two of the company's directors reported buying into its stock last week, each snapping up parcels of 100,000 shares."
Insider purchases by executives and directors are often interpreted as a vote of confidence by the market. This might be inspiring ASX investors to bid up the Polynovo share price in recent days.
The gain comes at the expense of short-sellers who still appear to have their tentacles wrapped around the stock. Polynovo is the fifth most shorted stock on the ASX, as we reported on Monday.
What do the experts think of Polynovo?
The shift in market sentiment appears to be matched by analyst sentiment. Three out of the five analysts covering Polynovo say it's a buy right now, according to Bloomberg data.
The teams at Evans & Partners, Macquarie, and Bell Potter say buy. They value Polynovo shares at 12-month target prices of $1.40, $1.60, and $1.50 respectively. Meanwhile, Ord Minnett and Wilsons each rate it as a hold.
Polynovo share price snapshot
In the past 12 months, the Polynovo share price has slipped by 55%.
Polynovo has a market capitalisation of $711.31 million with 661.7 million shares outstanding.
