Individual investors among Cyclopharm Limited's (ASX:CYC) largest shareholders, saw gain in holdings value after stock jumped 17% last week

Key Insights

• Cyclopharm's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 6 shareholders own 52% of the company
• Insiders have bought recently

To get a sense of who is truly in control of Cyclopharm Limited (ASX:CYC), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 40% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, individual investors benefitted the most after the company's market cap rose by AU$27m last week.

In the chart below, we zoom in on the different ownership groups of Cyclopharm.

Check out our latest analysis for Cyclopharm

What Does The Institutional Ownership Tell Us About Cyclopharm?

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.

We can see that Cyclopharm does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Cyclopharm's earnings history below. Of course, the future is what really matters.

It looks like hedge funds own 11% of Cyclopharm 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. Anglo Australian Christian And Charitable Fund, Endowment Arm is currently the largest shareholder, with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 10% of the stock. In addition, we found that James McBrayer, the CEO has 4.8% of the shares allocated to their name.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Cyclopharm

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Cyclopharm Limited. It has a market capitalization of just AU$182m, and insiders have AU$15m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in Cyclopharm. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 6.0% stake in Cyclopharm. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 21%, of the Cyclopharm stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Cyclopharm better, we need to consider many other factors. Be aware that Cyclopharm is showing 1 warning sign in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.