Is Vericel Corporation (VCEL) Soaring Insider Trading Sending a Signal?

The exact reason why investors have been taking up Vericel Corporation (NASDAQ:VCEL) stock at a frenetic pace might seem like a bit of a head-scratcher at the moment, but that’s only if you are buying the stock for the wrong reasons. On 07 November, the shares accumulated 0.44 points or 2.64 percent at $17.09 with a heavy trade volume of 2.759 million shares. After opening the session at $16.31, the shares went as high as $17.36 and as low as $15.91, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $725 million and now has 42.4 million shares outstanding. Vericel Corporation (VCEL) stock has gained 27.06 percent of market value in 21 trading days.

VCEL stock has a trailing 3-year beta of 3.37, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.49 a share in the trailing twelve months. The stock’s value has surged 213.58 percent year to date (YTD) against a rise of 304.5 percent in 12 month’s time. The company’s shares still trade -0.98 percent away from its 1-year high of $17.26 and 417.88 percent up from 52-week low of $3.30. The average consensus rating on the company is 1.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Vericel Corporation (VCEL) will probably climb -8.6 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $19-month high price target. This represents a whopping 11.18 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $16.1, which represents a return potential of -5.79 percent when compared to the closing price of the stock of $17.09 on Wednesday, November 07. The lowest price target for the stock is $14 — slightly more than -18.08 percent from VCEL’s current share price.

History has shown that shares in Vericel Corporation have gone up on 8 different earnings reaction days and are predicted to add 0.08 percent when the company reports upcoming earnings. Investors will get their next glimpse of VCEL’s Q4 earnings on March 05. Analysts are forecasting revenue to climb 21 percent to $28.25M in the fiscal fourth quarter, while earnings are seen soaring by nearly 33.33 percent to $0.04 per share. It earned -$0.02 per share, better than the -$0.11, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $19.01M, better than the $18.62M analysts expected. Earnings are estimated to increase by 55.9 percent this year, 79.5 percent next year and continue to increase by 0 percent annually for the next 5 years.

Let’s take a look at some insider activity at Vericel Corporation (NASDAQ:VCEL) and see the pattern. The earliest insider trade took place on 10/15/2018. Michel Gerard J parted with a total of 15 thousand shares of company at average share price of $12.65. The total for the sales was set at $189.75 thousand. After this transaction, the CFO and VP, Corp. Development account balance stood at 150.96 thousand shares. The stock grew 35.1 percent since that insider sale. On 10/04/2018, Colangelo Dominick, President and CEO, sold 75 thousand shares at a price per share of $15.02. This removed 1.13 million shares from the insider’s fortune and the stock saw a 13.78 percent rally in value since the news became public. This transaction left 75.16 thousand shares in the President and CEO account.

On 09/10/2018, CFO and VP, Corp. Development Michel Gerard J performed a sale transaction worth $185.25 thousand. This sale at $12.35 each has eliminated 15 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 38.38 percent increase since the transaction was reported. The insider now is left with 150.96 thousand shares remaining in the account. Gilman Steven C, who performs the Director job, sold 9 thousand shares for $108.27 thousand. The disposal occurred on 09/04/2018 was priced at $12.03 per share. The share price soared 42.06 percent since the reporting date. Gilman Steven C now left with a stake of 0 thousand VCEL stock worth $0 thousand after the insider selling.

The stock is currently hovering around the first support level of $16.21. Below this, the next support is placed in the zone of $15.34. Till the time, the VCEL stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 74.85 on daily chart, which may remain a cause for concern. If the price breaks below $15.34 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $17.66 mark may result into a pull-back move towards $18.24 level.

Further, it is sporting a 9.71 on the Price-to-Sales ratio. Compare this with the industry average P/S of 13.01. 58.5 percent is the gross profit margin for Vericel Corporation and operating margin sits at -16.4 percent. Along with this, the net profit margin is -23.3 percent.