After the recent decline, ME Therapeutics Holdings Inc. (CSE:METX) CEO Salim Dhanji's holdings have lost 10.0% of their value

Key Insights

• Insiders appear to have a vested interest in ME Therapeutics Holdings' growth, as seen by their sizeable ownership
• 62% of the business is held by the top 4 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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If you want to know who really controls ME Therapeutics Holdings Inc. (CSE:METX), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 64% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 10.0%.

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

See our latest analysis for ME Therapeutics Holdings

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

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

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 ME Therapeutics Holdings, for yourself, below.

ME Therapeutics Holdings is not owned by hedge funds. The company's CEO Salim Dhanji is the largest shareholder with 16% of shares outstanding. The second and third largest shareholders are John Priatel and Kenneth Harder, with an equal amount of shares to their name at 16%. Interestingly, the third-largest shareholder, Kenneth Harder is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of ME Therapeutics Holdings

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.

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 own more than half of ME Therapeutics Holdings Inc.. This gives them effective control of the company. Given it has a market cap of CA$236m, that means they have CA$151m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in ME Therapeutics Holdings. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand ME Therapeutics Holdings better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for ME Therapeutics Holdings you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.