Palatin Technologies Inc (NYSEMKT: PTN) Gaining Momentum

We mentioned in our last piece on Palatin Technologies, Inc. (NYSEMKT: PTN) (“Palatin”) that the company had been targeted by institutional investors and a large amount of financial sites were assessing the company. We remarked all these were good aspects and noted that the company should be followed closely. Well, we were actually correct as the share price has spiked more than 50% since we published that piece.Savvy individuals would be asking themselves: ok, but what happened? There should be some kind of catalyst to explain these extraordinary returns in such a short period of time. This is exactly what everyone is asking in forums, such as Yahoo Finance. Have a look. Honestly, we did not find any new communications delivered by the company, but the stock returns were so remarkable that further analysis seemed to be mandatory. In this article, we will provide some analysis to explain our conclusions and what can be going on with PTN.Have a look at the chart price, and note the recent spike:SourceNew Press releases?We checked the company's website to verify whether the share price was reacting to any of the press releases, but we did not find anything remarkable in April. The only press release issued was this one, which was released on April 19, but that only noted the fact that another financial site had covered the stock. The press release actually noted the astonishing returns delivered by the company:

"Cranbury, New Jersey-based Palatin Technologies Inc.'s stock gained 18.74%, to close the day at $0.41. The stock recorded a trading volume of 8.69 million shares, which was above its three months average volume of 1.87 million shares. Palatin Technologies' shares have gained 23.87% in the last one month" Source

Nothing else? Well, apart from this SEC Filing that announced that the next annual meeting will be held on June 8, 2017 in the company's offices in New Palatin’s offices in New Jersey. Nothing else.So, what could be going on?

1. New product in the pipeline or new patent?: The company could be almost ready to deliver a new press release about the receipt of a new patent as it happened on March 20, 2017. The fact that the company has obtained a new patent to commercialize may be seen as great news, as it means more money in revenues, as well as more recognition from the investment community.
2. Is AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) interested in buying the company? Honestly, it may not be quite unlikely as AMAG, which has a market cap. close to $847 million, is collaborating with Palatin. Two months ago, both companies signed an agreement that granted AMAG exclusive North American rights to develop Palatin's product; bremelanotide. Perhaps, AMAG's executives and research directors realized that the product has great potential, and decided to buy out its partner. AMAG holds $579 millions in cash, which is almost ten times, what it would have to pay to buy PTN. To sum up, buying PTN would extremely easy for AMAG.
3. Investors became aware of the opportunity very recently: The fact that many investment websites and the social media reacted positively to the good news delivered by the company in March could have made investors buy the stock. When there is a large amount of interest on the Internet such as it happened this time, the liquidity of the stock increases, and most of the times this effect increases the share price. We used Google trends and confirmed that the company was researched much more in 2017 than in 2016. Investors should have a look at it too. Additionally, investors should check from time to time trading forums, such as the Yahoo Finance Conversations, in order to measure traders' interest. This one, for example, actually contains 1,962 reactions as of May 1, 2017. If we compare it with other competitors' boards, such as the one of AMAG, we can see that PTN is more crowded as more traders are expecting a spike. As mentioned earlier, more investors interest means more liquidity and this usually means an increase in the share price.
4. Another hedge fund buying?: We noted in our previous piece that many funds had bought the company before. So, the recent uptrend may have caused by a new fund. Big funds usually buy large stakes very fast, as its investment managers do not want to give other market participants time to notice the new transaction. So, if this company is being bought by a new fund, we will get to know soon. Thus, if investors believe so, they may try to buy before the 13G appears on the SEC website.

Short InterestAccording to Yahoo Finance, the short interest is close to 9% as of May 1, 2017. We regularly check the short interest of the companies that we cover as it is very good indicator. In this name, we saw an increase of about 2% in the short interest. The fact that the company is being targeted by short sellers indicates that there is a part of the market that could get caught in a short squeeze.ConclusionPalatin Technologies has been a great pick of the editorial team. The company delivered outstanding returns to readers, who could buy when we delivered our first piece. In this article, we have disclosed some scenarios that could explain why the company's shares are worth everyday a little bit more. In our opinion, the market will get to know the answer soon, but until this happens, the share price may continue its uptrend. Additionally, we disclosed that short sellers are building a position that could lead to a short squeeze. To sum up, keep an eye on this name as we expect a big announcement soon. We will be updating our subscribers as soon as we know more. For the latest updates on PTN, sign up below!Disclosure: We have no position in PTN and have not been compensated for this article.