Institutions profited after Aroa Biosurgery Limited's (ASX:ARX) market cap rose AU$21m last week but retail investors profited the most

Key Insights

• The considerable ownership by retail investors in Aroa Biosurgery indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 13 shareholders
• Insiders have been selling lately

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Every investor in Aroa Biosurgery Limited (ASX:ARX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 13% increase in the stock price last week, retail investors profited the most, but institutions who own 29% stock also stood to gain from the increase.

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

View our latest analysis for Aroa Biosurgery

What Does The Institutional Ownership Tell Us About Aroa Biosurgery?

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.

We can see that Aroa Biosurgery does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Aroa Biosurgery's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Aroa Biosurgery. With a 9.6% stake, CEO Brian Ward is the largest shareholder. Harbour Asset Management Limited is the second largest shareholder owning 8.8% of common stock, and Acorn Capital Limited holds about 6.5% of the company stock.

After doing some more digging, we found that the top 13 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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.

Insider Ownership Of Aroa Biosurgery

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Aroa Biosurgery Limited. It has a market capitalization of just AU$186m, and insiders have AU$46m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Aroa Biosurgery. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Aroa Biosurgery that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.