The large shareholder groups of BeyondSpring Inc. (NASDAQ: BYSI) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders holding shares in smaller companies. I like to see at least a little insider ownership. As Charlie Munger said, “Show me the incentive and I’ll show you the result.
BeyondSpring is a small company with a market cap of US $ 654 million, so it may still go under the radar of many institutional investors. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. Let’s take a closer look at what different types of shareholders can tell us about BeyondSpring.
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What does institutional ownership tell us about BeyondSpring?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
BeyondSpring already has institutions on the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out BeyondSpring’s earning history below. Of course, the future is what really matters.
Hedge funds don’t have a lot of shares in BeyondSpring. The company’s CEO, Lan Huang, is the largest shareholder with 26% of the shares outstanding. In comparison, the second and third shareholders hold around 13% and 7.7% of the capital.
Looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a say in the decisions of the company.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.
BeyondSpring insider property
The definition of an insider may differ slightly from country to country, but board members still count. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
It appears that insiders own a significant proportion of BeyondSpring Inc. Insiders own $ 190 million in shares of the $ 654 million company. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.
General public property
The general public, with a 33% stake in the company, will not be easily overlooked. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
With an 18% stake, private equity firms are able to play a role in shaping corporate strategy with an emphasis on value creation. Some might like this, as sometimes private capital is activists holding management accountable. But other times, the private equity sells, after you take the company public.
I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. Consider, for example, the ever-present specter of investment risk. We have identified 4 warning signs with BeyondSpring (at least 2 which are a little worrying), and understanding them should be part of your investment process.
If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts’ forecasts for its future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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