Stock Traders Buy Large Volume of Put Options on Alector (NASDAQ:ALEC)

by · The Cerbat Gem

Alector, Inc. (NASDAQ:ALEC – Get Free Report) was the recipient of unusually large options trading on Tuesday. Traders acquired 20,569 put options on the stock. This represents an increase of approximately 5,950% compared to the typical volume of 340 put options.

Key Headlines Impacting Alector

Here are the key news stories impacting Alector this week:

  • Positive Sentiment: Genentech obtained exclusive global rights to develop and commercialize AL050, a brain-penetrant GCase enzyme replacement therapy designed to treat Parkinson’s disease and potentially other neurodegenerative conditions. The therapy uses Alector’s proprietary Alector Brain Carrier platform to cross the blood-brain barrier. Alector Genentech AL050 licensing announcement
  • Positive Sentiment: The agreement includes a reported $100 million upfront payment and could generate as much as $1.27 billion in milestone payments, in addition to royalties on potential future sales. The partnership gives Alector access to Roche’s development and commercialization resources while providing important validation for its blood-brain-barrier technology. Genentech pays Alector $100 million for Parkinson’s prospect
  • Neutral Sentiment: Coverage highlighting the Nobel Prize awarded to optogenetics researchers may improve investor interest in neuroscience and brain-delivery technologies, but it does not directly change Alector’s financial outlook or AL050’s clinical prospects. Optogenetics researchers win Nobel Prize; Roche bets on Alector brain drug
  • Negative Sentiment: AL050 remains a preclinical program, so the headline milestone value is dependent on future development, regulatory and commercial achievements. Investors may also be taking profits after the initial licensing-driven rally, contributing to subsequent weakness in ALEC shares.

Alector Stock Performance

Shares of NASDAQ ALEC traded down $0.04 during mid-day trading on Tuesday, hitting $1.96. 6,519,958 shares of the company were exchanged, compared to its average volume of 1,430,754. The company has a quick ratio of 5.26, a current ratio of 5.26 and a debt-to-equity ratio of 0.80. The stock has a 50 day simple moving average of $2.05 and a 200-day simple moving average of $2.03. Alector has a 1-year low of $1.09 and a 1-year high of $3.40. The firm has a market cap of $218.29 million, a price-to-earnings ratio of -1.78 and a beta of 0.62.

Alector (NASDAQ:ALEC – Get Free Report) last announced its quarterly earnings data on Thursday, August 6th. The company reported ($0.21) earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.23) by $0.02. The company had revenue of $3.32 million for the quarter, compared to analysts’ expectations of $1.71 million. Alector had a negative net margin of 850.13% and a negative return on equity of 531.03%. On average, sell-side analysts forecast that Alector will post -0.87 EPS for the current fiscal year.

Insider Activity at Alector

In related news, CEO Arnon Rosenthal sold 72,606 shares of the company’s stock in a transaction that occurred on Thursday, September 3rd. The stock was sold at an average price of $2.66, for a total value of $193,131.96. Following the completion of the transaction, the chief executive officer directly owned 2,294,600 shares of the company’s stock, valued at $6,103,636. This represents a 3.07% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CFO Neil Berkley sold 29,251 shares of the stock in a transaction that occurred on Thursday, September 3rd. The shares were sold at an average price of $2.66, for a total transaction of $77,807.66. Following the completion of the transaction, the chief financial officer owned 350,649 shares in the company, valued at $932,726.34. This represents a 7.70% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 111,303 shares of company stock valued at $295,633. 8.30% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in the company. The Manufacturers Life Insurance Company purchased a new stake in Alector in the 2nd quarter valued at approximately $39,000. Diversified Trust Co lifted its holdings in shares of Alector by 83.6% in the 1st quarter. Diversified Trust Co now owns 25,895 shares of the company’s stock valued at $56,000 after buying an additional 11,793 shares during the period. Hsbc Holdings PLC purchased a new stake in shares of Alector in the second quarter valued at approximately $98,000. Sei Investments Co. boosted its stake in shares of Alector by 218.9% in the first quarter. Sei Investments Co. now owns 53,846 shares of the company’s stock valued at $116,000 after buying an additional 36,962 shares in the last quarter. Finally, Ieq Capital LLC acquired a new position in Alector during the second quarter worth $122,000. 85.83% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

Several brokerages recently commented on ALEC. UBS Group reiterated a “neutral” rating and set a $1.50 price target on shares of Alector in a research note on Tuesday. Weiss Ratings raised Alector from a “sell (e+)” rating to a “sell (d-)” rating in a report on Thursday, August 13th. Finally, Morgan Stanley restated an “underweight” rating and set a $3.00 price target on shares of Alector in a research note on Tuesday. Three investment analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have issued a Sell rating to the company’s stock. According to MarketBeat.com, Alector has a consensus rating of “Hold” and a consensus price target of $3.40.

View Our Latest Stock Analysis on ALEC

About Alector

(Get Free Report)

Alector, Inc is a clinical-stage biotechnology company focused on developing therapies for neurodegenerative diseases. The company’s approach, known as immuno-neurology, seeks to use the immune system to protect brain health and address biological mechanisms involved in conditions such as Alzheimer’s disease, frontotemporal dementia and Parkinson’s disease.

Alector’s pipeline includes latozinemab, an antibody designed to increase levels of progranulin, a protein associated with the health and function of brain cells.

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