Painful week for retail investors invested in Avacta Group Plc (LON:AVCT) after 10% drop, institutions also suffered losses

Key Insights

• The considerable ownership by retail investors in Avacta Group indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 36% ownership
• 39% of Avacta Group is held by Institutions

To get a sense of who is truly in control of Avacta Group Plc (LON:AVCT), it is important to understand the ownership structure of the business. With 59% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 39% came under pressure after market cap dropped to UK£141m last week,retail investors took the most losses.

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

Check out our latest analysis for Avacta Group

What Does The Institutional Ownership Tell Us About Avacta Group?

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.

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

Hedge funds don't have many shares in Avacta Group. Our data shows that HBOS Investment Fund Managers Limited is the largest shareholder with 6.6% of shares outstanding. Jarvis Securities plc, Asset Management Arm is the second largest shareholder owning 5.2% of common stock, and Barclays Bank PLC, Wealth and Investment Management Division holds about 4.5% of the company stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Avacta Group

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. 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 most recent data indicates that insiders own less than 1% of Avacta Group Plc. It appears that the board holds about UK£78k worth of stock. This compares to a market capitalization of UK£141m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public -- including retail investors -- own 59% of Avacta Group. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Avacta Group better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Avacta Group you should be aware of, and 2 of them shouldn'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.