U.S. markets close in 22 minutes
  • S&P 500

    3,690.61
    +104.99 (+2.93%)
     
  • Dow 30

    29,579.72
    +854.21 (+2.97%)
     
  • Nasdaq

    10,857.88
    +282.26 (+2.67%)
     
  • Russell 2000

    1,714.85
    +50.13 (+3.01%)
     
  • Crude Oil

    83.49
    +4.00 (+5.03%)
     
  • Gold

    1,707.50
    +35.50 (+2.12%)
     
  • Silver

    20.75
    +1.71 (+8.99%)
     
  • EUR/USD

    0.9824
    +0.0023 (+0.24%)
     
  • 10-Yr Bond

    3.6510
    -0.1530 (-4.02%)
     
  • GBP/USD

    1.1318
    +0.0152 (+1.36%)
     
  • USD/JPY

    144.6980
    -0.0310 (-0.02%)
     
  • BTC-USD

    19,529.05
    +273.52 (+1.42%)
     
  • CMC Crypto 200

    443.56
    +8.21 (+1.89%)
     
  • FTSE 100

    6,908.76
    +14.95 (+0.22%)
     
  • Nikkei 225

    26,215.79
    +278.58 (+1.07%)
     

Sangamo Therapeutics, Inc.'s (NASDAQ:SGMO) recent 7.9% pullback adds to one-year year losses, institutional owners may take drastic measures

·5 min read

To get a sense of who is truly in control of Sangamo Therapeutics, Inc. (NASDAQ:SGMO), 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 58% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutional investors endured the highest losses after the company's share price fell by 7.9% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 45% for shareholders. Often called “market makers”, institutions wield significant power in influencing the price dynamics of any stock. Hence, if weakness in Sangamo Therapeutics' share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Sangamo Therapeutics.

View our latest analysis for Sangamo Therapeutics

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Sangamo 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 have a fair amount of stake in Sangamo 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 Sangamo Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Sangamo Therapeutics. Looking at our data, we can see that the largest shareholder is Biogen Inc. with 15% of shares outstanding. The second and third largest shareholders are Wasatch Advisors Inc and BlackRock, Inc., with an equal amount of shares to their name at 7.9%.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Sangamo 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.

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 Sangamo Therapeutics, Inc.. It has a market capitalization of just US$822m, and the board has only US$2.9m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 27% 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.

Public Company Ownership

We can see that public companies hold 15% of the Sangamo Therapeutics shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Sangamo Therapeutics you should know about.

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.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here