Yahoo Finance Private companies who have a significant stake must be disappointed along with institutions after PolyPeptide Group AG's (VTX:PPGN) market cap dropped by CHF74m
Key Insights
Significant control over PolyPeptide Group by private companies implies that the general public has more power to influence management and governance-related decisions
Draupnir Holding B.V. owns 56% of the company
Every investor in PolyPeptide Group AG (VTX:PPGN) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 56% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Following a 7.3% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 23% stock also took a hit.
Let's delve deeper into each type of owner of PolyPeptide Group, beginning with the chart below.
Check out our latest analysis for PolyPeptide Group
What Does The Institutional Ownership Tell Us About PolyPeptide Group?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in PolyPeptide Group. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 PolyPeptide Group's historic earnings and revenue below, but keep in mind there's always more to the story.
PolyPeptide Group is not owned by hedge funds. Our data shows that Draupnir Holding B.V. is the largest shareholder with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 5.2% and 3.3% of the stock. In addition, we found that Juan Gonzalez, the CEO has 0.7% of the shares allocated to their name.
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 PolyPeptide Group
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 some shares in PolyPeptide Group AG. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CHF42m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 17% stake in PolyPeptide Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
We can see that Private Companies own 56%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for PolyPeptide Group you should be aware of.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
