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Could The ImmunoPrecise Antibodies Ltd. (CVE:IPA) Ownership Structure Tell Us Something Useful?

Simply Wall St

A look at the shareholders of ImmunoPrecise Antibodies Ltd. (CVE:IPA) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'

ImmunoPrecise Antibodies is not a large company by global standards. It has a market capitalization of CA$39m, which means it wouldn't have the attention of many institutional investors. In the chart below below, we can see that institutions don't own many shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about IPA.

See our latest analysis for ImmunoPrecise Antibodies

TSXV:IPA Ownership Summary, August 15th 2019

What Does The Lack Of Institutional Ownership Tell Us About ImmunoPrecise Antibodies?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. ImmunoPrecise Antibodies's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

TSXV:IPA Income Statement, August 15th 2019

Hedge funds don't have many shares in ImmunoPrecise Antibodies. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of ImmunoPrecise Antibodies

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. 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.

Our most recent data indicates that insiders own a reasonable proportion of ImmunoPrecise Antibodies Ltd.. Insiders own CA$5.0m worth of shares in the CA$39m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- mostly retail investors -- own 66% of ImmunoPrecise Antibodies . With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 17%, of the IPA stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

It appears to us that public companies own 3.8% of IPA. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand ImmunoPrecise Antibodies better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.