G1 Therapeutics, Inc.'s (NASDAQ:GTHX) 47% loss last week hit both individual investors who own 60% as well as institutions
Key Insights
The considerable ownership by individual investors in G1 Therapeutics indicates that they collectively have a greater say in management and business strategy
35% of the business is held by the top 25 shareholders
To get a sense of who is truly in control of G1 Therapeutics, Inc. (NASDAQ:GTHX), it is important to understand the ownership structure of the business. With 60% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 47% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 25% stock also took a hit.
Let's take a closer look to see what the different types of shareholders can tell us about G1 Therapeutics.
See our latest analysis for G1 Therapeutics
What Does The Institutional Ownership Tell Us About G1 Therapeutics?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in G1 Therapeutics. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 G1 Therapeutics' earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in G1 Therapeutics. Our data shows that Eshelman Ventures, LLC is the largest shareholder with 8.7% of shares outstanding. With 5.7% and 3.8% of the shares outstanding respectively, MedImmune Ventures, Inc. and The Vanguard Group, Inc. are the second and third largest shareholders.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of G1 Therapeutics
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 see that insiders own shares in G1 Therapeutics, Inc.. In their own names, insiders own US$1.4m worth of stock in the US$124m 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, mostly comprising of individual investors, collectively holds 60% of G1 Therapeutics shares. With this amount 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 vote on acquisitions or mergers that may not improve profitability.
Private Equity Ownership
Private equity firms hold a 14% stake in G1 Therapeutics. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - G1 Therapeutics has 3 warning signs (and 1 which can't be ignored) we think you should know about.
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.
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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.
