Retail investors are Mesoblast Limited's (ASX:MSB) biggest owners and were hit after market cap dropped AU$96m

Key Insights

• The considerable ownership by retail investors in Mesoblast indicates that they collectively have a greater say in management and business strategy
• The top 8 shareholders own 50% of the company
• Insiders have been buying lately

Our free stock report includes 1 warning sign investors should be aware of before investing in Mesoblast. Read for free now.

Every investor in Mesoblast Limited (ASX:MSB) should be aware of the most powerful shareholder groups. With 39% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders, who own 37% shares weren’t spared from last week’s AU$96m market cap drop, retail investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Mesoblast, beginning with the chart below.

Check out our latest analysis for Mesoblast

What Does The Institutional Ownership Tell Us About Mesoblast?

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.

As you can see, institutional investors have a fair amount of stake in Mesoblast. 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 Mesoblast's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Mesoblast. The company's largest shareholder is Gregory George, with ownership of 20%. For context, the second largest shareholder holds about 6.2% of the shares outstanding, followed by an ownership of 5.2% by the third-largest shareholder. Silviu Itescu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We also observed that the top 8 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.

Insider Ownership Of Mesoblast

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Mesoblast Limited. It is very interesting to see that insiders have a meaningful AU$820m stake in this AU$2.2b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Mesoblast. 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.

Next Steps:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Mesoblast , and understanding them should be part of your investment process.

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.