Merck & Co. Inc. Makes New $7.13 Billion Investment in Alector, Inc. $ALEC

Key Points

• Merck & Co. disclosed a new Alector stake of 3.55 million shares, reportedly valued at approximately $7.13 billion and representing about 3.19% of Alector; the position makes up 1.4% of Merck’s portfolio.
• Alector insiders sold 115,760 shares worth approximately $227,734 over the past three months, while institutional investors collectively own 85.83% of the company.
• Alector reported a quarterly loss of $0.21 per share, beating estimates by $0.02, and revenue of $3.32 million versus $1.71 million expected. Analysts maintain a consensus “Hold” rating with a $3.62 price target.

Merck & Co. Inc. bought a new stake in shares of Alector, Inc. (NASDAQ:ALEC - Free Report) in the second quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor bought 3,545,719 shares of the company's stock, valued at approximately $7,126,896,000. Alector comprises about 1.4% of Merck & Co. Inc.'s portfolio, making the stock its 8th biggest holding. Merck & Co. Inc. owned approximately 3.19% of Alector as of its most recent SEC filing.

Other hedge funds and other institutional investors have also made changes to their positions in the company. Bronte Capital Management Pty Ltd. purchased a new stake in shares of Alector during the fourth quarter worth approximately $30,000. Hershey Trust Co. raised its stake in Alector by 100.0% in the 4th quarter. Hershey Trust Co. now owns 20,572 shares of the company's stock valued at $32,000 after purchasing an additional 10,286 shares during the last quarter. Prudential Financial Inc. purchased a new position in Alector in the 2nd quarter valued at $30,000. Virtu Financial LLC purchased a new position in Alector in the 4th quarter valued at $34,000. Finally, Dynamic Technology Lab Private Ltd acquired a new stake in Alector during the 4th quarter worth $40,000. Hedge funds and other institutional investors own 85.83% of the company's stock.

Insider Activity

In related news, CEO Arnon Rosenthal sold 87,216 shares of the firm's stock in a transaction dated 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 directly owned 2,367,206 shares in the company, valued at approximately $4,663,395.82. This trade represents a 3.55% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CFO Neil Lindsay Berkley sold 19,360 shares of Alector stock in a transaction dated Tuesday, June 2nd. The stock was sold at an average price of $1.97, for a total transaction of $38,139.20. Following the transaction, the chief financial officer directly owned 379,900 shares in the company, valued at $748,403. This trade represents a 4.85% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 115,760 shares of company stock worth $227,734. Corporate insiders own 8.30% of the company's stock.

Alector Stock Performance

Shares of Alector stock opened at $2.05 on Tuesday. The business's 50 day moving average price is $1.70 and its 200 day moving average price is $2.01. The company has a market cap of $228.90 million, a price-to-earnings ratio of -1.86 and a beta of 0.60. The company has a debt-to-equity ratio of 0.80, a quick ratio of 5.26 and a current ratio of 5.26. Alector, Inc. has a one year low of $1.09 and a one year high of $3.40.

Alector (NASDAQ:ALEC - Get Free Report) last issued its earnings results 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. Alector had a negative return on equity of 531.03% and a negative net margin of 850.13%.The company had revenue of $3.32 million during the quarter, compared to analysts' expectations of $1.71 million. On average, research analysts predict that Alector, Inc. will post -0.87 EPS for the current year.

Wall Street Analyst Weigh In

A number of research firms have recently issued reports on ALEC. Wall Street Zen raised shares of Alector from a "sell" rating to a "hold" rating in a report on Saturday, May 9th. Weiss Ratings raised shares of Alector from a "sell (e+)" rating to a "sell (d-)" rating in a research note on Thursday. Finally, Morgan Stanley restated an "underweight" rating and set a $2.00 price target on shares of Alector in a research report on Monday, May 4th. Three research analysts have rated the stock with a Buy rating, three have assigned a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat, Alector presently has an average rating of "Hold" and a consensus price target of $3.62.

Alector Company Profile

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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