In early August, after reporting second quarter results that were in line with expectations, the company's share price swiftly declined from $2.23 to $1.81 per share. By the following week, a group of four ACLS directors purchased 60,000 shares at an average price of $1.88 per share. This is another bullish indicator that shows support by insiders for the current share price. These open market share purchases were in addition to the option grants that directors received just one month earlier.
We also note the observance of a significant open interest in the $2.50 strike for December 21, 2013 expiration. Currently there are almost 13,400 contracts open which equates to 1.3 million shares, or 1.2% of the total shares outstanding. At a price of $0.15c per contract, a bullish investor is wagering that ACLS's stock price will be at least $2.65 per share by the end of the year to break even on the position. Such a large open interest in a micro-cap stock is a highly unusual and a very bullish indicator.
Lastly, we note that just one sell-side analyst at Craig Hallum research covers Axcelis, and has a buy rating with a $3.50 price target. In reviewing the estimates for 2014, it appears the analyst is giving significant room for upside revisions to sales and earnings estimates. We note that quarterly revenue and earnings peak at just $80.1m and $0.06c per quarter. If management can deliver on its promises of revenue exceeding its prior cyclical peak of $93m, and capturing medium current market share, the likelihood of further price target increases appears skewed to the upside.
In reviewing the recent Q2'13 investor conference call, Edwin Mok, semiconductor capital equipment analyst from Needham & Company, asked questions of management. In the prior quarter, not even a single analyst joined the call to ask a question. Meanwhile, the company has kick-started its investor relations campaign, and presented earlier this year at investor conferences hosted by Stifel Nicolaus, UBS, and Piper Jaffray. The company will continue to present at additional investor conferences in September and through the remainder of the year. Given the renewed interest by the analyst community, there is an above average likelihood of broker research initiations in the coming months.