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Our Indicators Show Axcella Health Is Experiencing Significant Insider Buying Activity

By Fintel. Originally published at ValueWalk.

Axcella Health

Our Fintel Significant Insider Buying Activity leaderboard has drawn us to take a look at AXLA, a stock that has an Insider Accumulation Score of 99.24 and is currently at the top of our leaderboard. Fintel’s Insider Accumulation Score is the result of a sophisticated, multi-factor quantitative model that identifies companies with the highest levels of insider accumulation. The scoring model uses a combination of the net number of insiders buying the prior 90 days, the total shares bought as a percentage of float, and the total shares owned by insiders. The number ranges from 0 to 100, with higher numbers indicating a higher level of accumulation to its peers, and 50 being the average.


Q1 2022 hedge fund letters, conferences and more

Insider Buying Activity At Axcella Health

Axcella Health Inc (NASDAQ:AXLA) is a clinical-stage biotechnology company pioneering a new approach to treat complex diseases using endogenous metabolic modulator (EMM) compositions. EMMs fundamentally impact and regulate metabolism, controlling many of the biological functions.

There is significant academic research that suggests corporate insiders outperform the market when buying shares in their own companies. This screen identifies companies with significant insider buying by corporate insiders.

We have included a chart below that shows short-term stock performance of Axcella Health Inc subsequent to each open-market, non-planned purchase made. The performance of each trade is plotted until it reaches its maximum, or one year later, whichever comes first.

Axcella Health

AXLA has a market cap of $92 million and has had 5 net insiders who have bought $18 million worth of stock over the past 90 days. The insiders have accumulated roughly 44.5% of the float at an average price of $1.91 per share. The share price is now -8.4% below the average price at $1.75. Axcella shares have fallen -21.5% since the beginning of 2022 and are down -55.4% over the last year which may have contributed to the increased insider buying activity. We note the stock was first listed on the Nasdaq in 2019 at $15.12 a share and continued to trend lower over time.

Axcella last updated the market on the 30th of March when they reported Q4 results. The result posted EPS of -46 cents, relatively in-line with the market that was expecting -45 cents. They reported having cash and liquid assets of $55 million on hand and spent $12.5 million in Research & Development expenses over the three months. Management also notified the market that they had received $25 million in cash from the recent placement and that the company would have sufficient liquidity to meet its operating needs into 2023. In February the FDS granted a Fast Track Designation to the firm’s AXA1125 treatment of non-alcoholic steatohepatitis (NASH) with liver fibrosis.

We also had a look at Institutional Ownership in addition to the insiders. Axcella Health Inc (US:AXLA) has 59 institutional owners and shareholders that have filed 13D/G or 13F forms with the Securities Exchange Commission (SEC). These institutions own 24.4 million shares. Institutions stepped up buying in September 2020 and have since generally held positions firm. We have included a chart below that illustrates this:

Axcella Health

AXLA has a consensus ‘overweight’ rating with an average target price of $12.40 per share, implying over 600% upside to the current price. We note consensus targets have remained above ~$12 for the past 2 years as the price has continued to slide.

The stock has a a Fintel Put/Call Ratio of 0.12 which indicates to us that there is bullish sentiment in the stock. The Put/Call Ratio shows the total number of disclosed open put option positions divided by the number of open call option options. Since puts are generally a bearish bet and calls are a bullish bet, put/call ratios greater than 1 indicate a bearish sentiment, and ratios less than one indicate a bullish sentiment.

More about the Significant Insider Buying Activity leaderboard

The table shows companies with the most compelling insider trading quant score. The Insider Accumulation Score is the result of a sophisticated, multi-factor quantitative model that identifies companies with the highest levels of insider accumulation. The scoring model uses a combination of the net number of insiders buying the prior 90 days, the total shares bought as a percentage of float, and the total shares owned by insiders.

Article by Ben Ward, Fintel

Updated on

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