Paratek Pharmaceuticals, Inc. (NASDAQ:PRTK) is definitely on the radar of institutional investors who own 48% of the company
Key Insights
Significantly high institutional ownership implies Paratek Pharmaceuticals' stock price is sensitive to their trading actions
A total of 22 investors have a majority stake in the company with 50% ownership
Every investor in Paratek Pharmaceuticals, Inc. (NASDAQ:PRTK) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's delve deeper into each type of owner of Paratek Pharmaceuticals, beginning with the chart below.
Check out our latest analysis for Paratek Pharmaceuticals
What Does The Institutional Ownership Tell Us About Paratek Pharmaceuticals?
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.
Paratek Pharmaceuticals 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. 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 Paratek Pharmaceuticals' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Paratek Pharmaceuticals. Looking at our data, we can see that the largest shareholder is Continental General Insurance Company, Asset Management Arm with 6.4% of shares outstanding. James Dondero is the second largest shareholder owning 5.0% of common stock, and Highland Capital Management, L.P. holds about 4.3% of the company stock. Additionally, the company's CEO Evan Loh directly holds 1.9% of the total shares outstanding.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 22 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Paratek Pharmaceuticals
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.
Our information suggests that insiders maintain a significant holding in Paratek Pharmaceuticals, Inc.. Insiders own US$16m worth of shares in the US$126m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 39% 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Paratek Pharmaceuticals better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Paratek Pharmaceuticals you should be aware of, and 1 of them is potentially serious.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
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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.
