After losing 38% in the past year, AbCellera Biologics Inc. (NASDAQ:ABCL) institutional owners must be relieved by the recent gain
Key Insights
Institutions' substantial holdings in AbCellera Biologics implies that they have significant influence over the company's share price
A total of 8 investors have a majority stake in the company with 51% ownership
To get a sense of who is truly in control of AbCellera Biologics Inc. (NASDAQ:ABCL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutional investors would appreciate the 5.6% increase in share price last week, given their one-year losses have totalled a disappointing 38%.
In the chart below, we zoom in on the different ownership groups of AbCellera Biologics.
Check out our latest analysis for AbCellera Biologics
What Does The Institutional Ownership Tell Us About AbCellera Biologics?
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.
AbCellera Biologics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 AbCellera Biologics, (below). Of course, keep in mind that there are other factors to consider, too.
It looks like hedge funds own 7.8% of AbCellera Biologics 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. With a 21% stake, CEO Carl Hansen is the largest shareholder. With 8.2% and 7.8% of the shares outstanding respectively, Baillie Gifford & Co. and Baker Bros. Advisors LP are the second and third largest shareholders.
On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. 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 AbCellera Biologics
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.
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.
It seems insiders own a significant proportion of AbCellera Biologics Inc.. It has a market capitalization of just US$1.5b, and insiders have US$418m worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand AbCellera Biologics better, we need to consider many other factors. For instance, we've identified 1 warning sign for AbCellera Biologics that you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
