A look at the shareholders of Celcuity Inc. (NASDAQ:CELC) can tell us which group is most powerful. The group holding the most number of shares in the company, around 28% to be precise, is institutions. 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$20m in market cap last week. The one-year return on investment is currently 22% and last week's gain would have been more than welcomed.
Let's take a closer look to see what the different types of shareholders can tell us about Celcuity.
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.
Celcuity 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. 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 Celcuity's historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 15% of Celcuity 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. The company's CEO Brian Sullivan is the largest shareholder with 14% of shares outstanding. VR Adviser, LLC is the second largest shareholder owning 9.5% of common stock, and Soleus Capital Management, L.P. holds about 8.7% of the company stock.
We also observed that the top 6 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.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Our most recent data indicates that insiders own a reasonable proportion of Celcuity Inc.. Insiders have a US$42m stake in this US$209m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
The general public, who are usually individual investors, hold a 15% stake in Celcuity. 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.
With a stake of 22%, private equity firms could influence the Celcuity board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Celcuity (of which 1 can't be ignored!) you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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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