Regeneron Pharmaceuticals, Inc.'s (NASDAQ:REGN) large institutional owners must be happy as stock continues to impress, up 3.2% over the past week

Key Insights

• Institutions' substantial holdings in Regeneron Pharmaceuticals implies that they have significant influence over the company's share price

• A total of 10 investors have a majority stake in the company with 51% ownership

• Insiders have sold recently

If you want to know who really controls Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), then you'll have to look at the makeup of its share registry. With 85% stake, institutions 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.

And things are looking up for institutional investors after the company gained US$3.3b in market cap last week. One-year return to shareholders is currently 30% and last week’s gain was the icing on the cake.

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

Check out our latest analysis for Regeneron Pharmaceuticals

ownership-breakdown

What Does The Institutional Ownership Tell Us About Regeneron 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.

As you can see, institutional investors have a fair amount of stake in Regeneron Pharmaceuticals. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Regeneron Pharmaceuticals' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Regeneron Pharmaceuticals. Our data shows that FMR LLC is the largest shareholder with 9.1% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 8.0% of common stock, and Capital Research and Management Company holds about 7.9% of the company stock. In addition, we found that Leonard Schleifer, the CEO has 2.2% of the shares allocated to their name.

We also observed that the top 10 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 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 Regeneron Pharmaceuticals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Regeneron Pharmaceuticals, Inc.. It is a very large company, and board members collectively own US$4.3b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Regeneron Pharmaceuticals .

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.