Alector (NASDAQ:ALEC) Shares Up 7.9% - Still a Buy?

Key Points

• Alector shares rose 7.9% in mid-day trading, reaching as high as $1.53 after closing at $1.39 the prior day. Trading volume was below average, with about 719,640 shares changing hands.
• Analyst sentiment remains mixed: Cantor Fitzgerald upgraded the stock to overweight, while Weiss Ratings kept a sell rating and Morgan Stanley reiterated underweight. Overall, the consensus rating is Hold with a $3.62 price target.
• The company recently reported a smaller-than-expected quarterly loss of ($0.21) per share, but revenue of $1.05 million fell well short of estimates. Insider selling also continued, including stock sales by the CEO and CFO.

Alector, Inc. (NASDAQ:ALEC - Get Free Report)'s share price was up 7.9% during mid-day trading on Wednesday . The stock traded as high as $1.53 and last traded at $1.50. Approximately 719,640 shares changed hands during mid-day trading, a decline of 17% from the average daily volume of 864,624 shares. The stock had previously closed at $1.39.

Analyst Ratings Changes

A number of equities analysts have recently commented on the stock. Weiss Ratings reaffirmed a "sell (e+)" rating on shares of Alector in a research report on Monday, May 4th. Cantor Fitzgerald upgraded Alector from a "neutral" rating to an "overweight" rating in a report on Wednesday, April 15th. Morgan Stanley reissued an "underweight" rating and issued a $2.00 price objective on shares of Alector in a research note on Monday, May 4th. Finally, Wall Street Zen upgraded Alector from a "sell" rating to a "hold" rating in a report on Saturday, May 9th. Three analysts have rated the stock with a Buy rating, three have assigned a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat, Alector has a consensus rating of "Hold" and a consensus price target of $3.62.

Alector Stock Performance

The company has a debt-to-equity ratio of 0.80, a current ratio of 5.25 and a quick ratio of 5.25. The company has a market cap of $166.54 million, a PE ratio of -1.26 and a beta of 0.60. The business has a fifty day simple moving average of $1.90 and a two-hundred day simple moving average of $2.03.

Alector (NASDAQ:ALEC - Get Free Report) last announced its quarterly earnings results on Thursday, May 7th. The company reported ($0.21) earnings per share (EPS) for the quarter, beating analysts' consensus estimates of ($0.29) by $0.08. Alector had a negative return on equity of 295.17% and a negative net margin of 680.83%.The business had revenue of $1.05 million for the quarter, compared to the consensus estimate of $9.67 million. Research analysts anticipate that Alector, Inc. will post -0.86 earnings per share for the current year.

Insider Activity

In related news, CEO Arnon Rosenthal sold 87,216 shares of the stock in a transaction that occurred on Tuesday, June 2nd. The shares were sold at an average price of $1.97, for a total transaction of $171,815.52. Following the completion of the sale, the chief executive officer owned 2,367,206 shares of the company's stock, valued at $4,663,395.82. This represents a 3.55% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, CFO Neil Lindsay Berkley sold 19,360 shares of the firm's stock in a transaction that occurred on Tuesday, June 2nd. The shares were sold at an average price of $1.97, for a total transaction of $38,139.20. Following the completion of the sale, the chief financial officer owned 379,900 shares of the company's stock, valued at approximately $748,403. This trade represents a 4.85% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders have sold 117,580 shares of company stock valued at $232,557. Insiders own 8.30% of the company's stock.

Institutional Trading of Alector

Hedge funds and other institutional investors have recently made changes to their positions in the business. Vanguard Group Inc. grew its stake in Alector by 0.8% during the 3rd quarter. Vanguard Group Inc. now owns 6,034,659 shares of the company's stock worth $17,863,000 after buying an additional 46,955 shares during the last quarter. Foresite Capital Management IV LLC acquired a new stake in Alector in the fourth quarter worth about $6,064,000. 683 Capital Management LLC boosted its holdings in Alector by 235.0% in the fourth quarter. 683 Capital Management LLC now owns 3,350,000 shares of the company's stock worth $5,226,000 after acquiring an additional 2,350,000 shares in the last quarter. Balyasny Asset Management L.P. purchased a new stake in shares of Alector during the fourth quarter worth about $5,094,000. Finally, Jacobs Levy Equity Management Inc. grew its position in Alector by 76.5% during the 4th quarter. Jacobs Levy Equity Management Inc. now owns 2,173,202 shares of the company's stock worth $3,390,000 after purchasing an additional 942,228 shares during the last quarter. Hedge funds and other institutional investors own 85.83% of the company's stock.

About Alector

Alector is a clinical-stage biotechnology company headquartered in South San Francisco, California. Founded in 2013, the company is focused on discovering and developing immuno-neurology therapies that target the innate immune system to treat a range of neurodegenerative disorders. Alector's approach aims to harness the body's natural defense mechanisms to clear pathological proteins and restore neuronal function in conditions such as Alzheimer's disease and frontotemporal dementia.

The company's pipeline includes multiple product candidates in both preclinical and clinical stages, with lead programs AL001 and AL002 advancing in frontotemporal dementia and Alzheimer's disease studies.

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