The big shareholder groups in Leap Therapeutics, Inc. (NASDAQ:LPTX) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.
Leap Therapeutics is a smaller company with a market capitalization of US$36m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about LPTX.
What Does The Institutional Ownership Tell Us About Leap Therapeutics?
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 own 14% of Leap Therapeutics. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Leap Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.
Leap Therapeutics is not owned by hedge funds. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Leap Therapeutics
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Our most recent data indicates that insiders own less than 1% of Leap Therapeutics, Inc.. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than US$77k worth of shares in the US$36m company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
With a 45% ownership, the general public have some degree of sway over LPTX. 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 30%, 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.
Private Company Ownership
It seems that Private Companies own 4.8%, of the LPTX stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Public Company Ownership
Public companies currently own 6.2% of LPTX stock. We can't be certain, but this is quite possible this is a strategic stake. The businesses may be similar, or work together.
It's always worth thinking about the different groups who own shares in a company. But to understand Leap Therapeutics better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can find 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.
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