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The large groups of shareholders in 4D Pharma plc (LON: DDDD) have power over the company. Institutions often own stocks in larger companies, and we expect insiders to own a significant percentage of the smaller ones. Warren Buffett said he likes “a company that has an enduring competitive advantage and is run by capable, owner-focused people.” Hence, it’s nice to see some inside ownership as it may suggest the management is owner-focused.
4D Pharma is not a large company by global standards. It has a market capitalization of £ 116 million, which means it would not have the attention of many institutional investors. In the following graphic we can see that institutions stand out in the share register. Let’s dive deeper into each type of owner to learn more about 4D Pharma.
Check out our latest analysis for 4D Pharma
What does institutional ownership tell us about 4D Pharma?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they are often more enthusiastic about a stock once it has been included in a large index. We would expect most companies to have some institutes on their register, especially as they grow.
We see that 4D Pharma has institutional investors; and they hold a good chunk of the company’s stock. This may suggest that the company has some credibility in the investment community. However, it is best to be careful not to rely on the supposed validation of institutional investors. Sometimes they get it wrong too. It is not uncommon for the stock price to drop sharply when two large institutional investors are trying to sell a stock at the same time. It is therefore worth checking the previous earnings development of 4D-Pharma (below). Of course, keep in mind that there are other factors to consider as well.
4D Pharma is not owned by hedge funds. The company’s largest shareholder is Steven Oliveira with an 11% stake. In comparison, the second and third largest shareholders hold around 5.3% and 5.2% of the shares, respectively. Two of the three largest shareholders are each chief executive officer and member of the board of directors. That is, insiders are higher up the company’s top stockholders hierarchy.
A closer look at our ownership numbers shows that the 13 largest shareholders together own 51%, which means that no single shareholder has a majority.
Studying institutional ownership is a great way to measure and filter the expected performance of a stock. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock so you can easily look at the forecast growth.
4D Pharma insider property
The definition of corporate insider can be subjective and varies depending on the legal system. Our data reflects individual insiders and at least includes board members. Management ultimately replies to the board. However, it is not uncommon for managers to be board members, especially when they are founders or CEOs.
I generally think insider ownership is a good thing. In some cases, however, it makes it difficult for other shareholders to hold the board responsible for decisions.
We understand that insiders have a significant stake in 4D pharma plc. It has a market capitalization of just £ 116m and insiders have £ 30m worth of stocks in their own name. This could indicate that the founders still own a lot of stocks. You can click here to see if they bought or sold.
General public property
With a share of 25%, the public has a certain influence on 4D Pharma. While this group may not necessarily be in charge, it can certainly have a real impact on how the company is run.
Corporation
Public companies currently own 5.2% of 4D Pharma shares. This can be a strategic interest and the two companies can have related business interests. It could be that they broke up. This involvement is likely worth further investigation.
Next Steps:
It is always worth thinking about the different groups that own shares in a company. However, in order to better understand 4D Pharma we have to consider many other factors. For example we discovered 4 warning signs for 4D Pharma (1 is Potentially Serious!) To Consider Before Investing Here.
Eventually the future is the most important thing. You can access it for free Report on analyst forecast for the company.
Note: The numbers in this article are calculated using data for the past twelve months, which refers to the twelve month period ending on the last day of the month in which the financial statements are dated. This may not match the figures in the annual financial statements.
This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.
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