Recent 14% decline may not have gone down well with PYC Therapeutics Limited (ASX:PYC) insiders who've been purchasing recently

Key Insights

• PYC Therapeutics' significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 6 shareholders
• Insiders have bought recently

If you want to know who really controls PYC Therapeutics Limited (ASX:PYC), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

It's interesting to note that insiders have been buying shares recently. However, with shares price down 14% last week, they must be disappointed.

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

View our latest analysis for PYC Therapeutics

What Does The Lack Of Institutional Ownership Tell Us About PYC Therapeutics?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of PYC Therapeutics, for yourself, below.

Hedge funds don't have many shares in PYC Therapeutics. Looking at our data, we can see that the largest shareholder is Alan Tribe with 34% of shares outstanding. For context, the second largest shareholder holds about 4.0% of the shares outstanding, followed by an ownership of 3.6% by the third-largest shareholder.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of PYC Therapeutics

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 PYC Therapeutics Limited. Insiders have a AU$202m stake in this AU$443m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 13%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that PYC Therapeutics is showing 4 warning signs in our investment analysis , and 1 of those can't be ignored...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com