Hedge funds investors may adopt severe steps after Adaptimmune Therapeutics plc's (NASDAQ:ADAP) latest 20% drop adds to a year losses
Every investor in Adaptimmune Therapeutics plc (NASDAQ:ADAP) should be aware of the most powerful shareholder groups. With 35% stake, hedge funds 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).
As a result, hedge funds investors endured the highest losses last week after market cap fell by US$67m. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 54% for shareholders. Hedge funds are often aggressively managed, usually with the goal of focusing on short-term profits. Because of their large stake in Adaptimmune Therapeutics, they hold a lot of power, and persistent under performance could lead to them influencing management decisions that might diverge from the company's long-term goals.
Let's delve deeper into each type of owner of Adaptimmune Therapeutics, beginning with the chart below.
View our latest analysis for Adaptimmune Therapeutics
What Does The Institutional Ownership Tell Us About Adaptimmune Therapeutics?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Adaptimmune Therapeutics. 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. 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 Adaptimmune Therapeutics' earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 35% of Adaptimmune Therapeutics. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Our data shows that Matrix Capital Management Company, LP is the largest shareholder with 24% of shares outstanding. The second and third largest shareholders are Baillie Gifford & Co. and New Enterprise Associates, Inc., with an equal amount of shares to their name at 10%.
On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Adaptimmune Therapeutics
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can see that insiders own shares in Adaptimmune Therapeutics plc. In their own names, insiders own US$3.4m worth of stock in the US$270m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public-- including retail investors -- own 27% 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 10%, 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Adaptimmune Therapeutics better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Adaptimmune Therapeutics (including 1 which doesn't sit too well with us) .
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.
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