Achieve Life Sciences, Inc.'s (NASDAQ:ACHV) market cap touched US$109m last week, benefiting both retail investors who own 59% as well as institutions
Key Insights
Achieve Life Sciences' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
40% of the business is held by the top 25 shareholders
A look at the shareholders of Achieve Life Sciences, Inc. (NASDAQ:ACHV) can tell us which group is most powerful. With 59% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Following a 11% increase in the stock price last week, retail investors profited the most, but institutions who own 40% stock also stood to gain from the increase.
Let's delve deeper into each type of owner of Achieve Life Sciences, beginning with the chart below.
Check out our latest analysis for Achieve Life Sciences
What Does The Institutional Ownership Tell Us About Achieve Life Sciences?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Achieve Life Sciences already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Achieve Life Sciences' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Achieve Life Sciences. B. Riley Capital Management, LLC is currently the largest shareholder, with 17% of shares outstanding. Contrarian Alpha Management, LLC is the second largest shareholder owning 6.8% of common stock, and Shay Capital LLC holds about 3.5% of the company stock.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Achieve Life Sciences
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
We can report that insiders do own shares in Achieve Life Sciences, Inc.. As individuals, the insiders collectively own US$1.1m worth of the US$109m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 59% stake in Achieve Life Sciences, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Achieve Life Sciences better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for Achieve Life Sciences you should be aware of, and 2 of them make us uncomfortable.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
