U.S. Markets open in 43 mins
  • S&P Futures

    4,190.25
    +65.75 (+1.59%)
     
  • Dow Futures

    33,130.00
    +393.00 (+1.20%)
     
  • Nasdaq Futures

    13,318.25
    +286.75 (+2.20%)
     
  • Russell 2000 Futures

    1,946.80
    +32.20 (+1.68%)
     
  • Crude Oil

    89.99
    -0.51 (-0.56%)
     
  • Gold

    1,821.40
    +9.10 (+0.50%)
     
  • Silver

    20.67
    +0.19 (+0.94%)
     
  • EUR/USD

    1.0340
    +0.0123 (+1.1995%)
     
  • 10-Yr Bond

    2.6740
    -0.1230 (-4.40%)
     
  • Vix

    22.14
    +0.85 (+3.99%)
     
  • GBP/USD

    1.2242
    +0.0166 (+1.3761%)
     
  • USD/JPY

    132.9220
    -2.1940 (-1.6238%)
     
  • BTC-USD

    23,699.77
    +391.35 (+1.68%)
     
  • CMC Crypto 200

    554.11
    -3.24 (-0.58%)
     
  • FTSE 100

    7,517.40
    +29.25 (+0.39%)
     
  • Nikkei 225

    27,819.33
    -180.67 (-0.65%)
     

Could The Aura Biosciences, Inc. (NASDAQ:AURA) Ownership Structure Tell Us Something Useful?

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

The big shareholder groups in Aura Biosciences, Inc. (NASDAQ:AURA) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Aura Biosciences is not a large company by global standards. It has a market capitalization of US$420m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Aura Biosciences.

See our latest analysis for Aura Biosciences

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Aura Biosciences?

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.

As you can see, institutional investors have a fair amount of stake in Aura Biosciences. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Aura Biosciences' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
earnings-and-revenue-growth

It looks like hedge funds own 22% of Aura Biosciences shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is Matrix Capital Management Company, LP, with ownership of 14%. Meanwhile, the second and third largest shareholders, hold 10% and 7.9%, of the shares outstanding, respectively.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Aura Biosciences

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can report that insiders do own shares in Aura Biosciences, Inc.. It has a market capitalization of just US$420m, and insiders have US$23m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 35%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Aura Biosciences (2 make us uncomfortable) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here