Ares Trading, already a major holder in Precigen (PGEN), recently added another $25 million investment. At that price, the company was able to pick up 6,758,400 shares. That’s a 32 percent increase to the fund’s stake in the company.
The move dwarfs the insider sales in the past month from company insiders. The buy comes as shares of the company have dropped from $15 to under $4 in the past two years. Insiders, including Ares Trading, own over 15 percent of shares.
Precigen develops gene and cellular therapies, including disease-modifying therapeutics. As an early-stage biotech company, shares are not profitable.
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Action to take: Shares are just under $5 right now. That price alone makes for a reasonable speculation, as the shares don’t have to contend with the time decay that options face. With a large fund making a huge buy, traders should expect market-beating returns, although that may require holding shares for longer than the next upswing.
For more aggressive traders, the April 2021 $5 calls are at-the-money and trading for about $1.40 right now. That’s a trade that should start moving penny-for-penny with shares as they top $5, and could offer high-double to low-triple digit returns.
With a 52-week high for shares in the $7 range, the trade could fare even better, but options traders should look for a quick swing to take profits.