Institutional investors are ImmuPharma plc's (LON:IMM) biggest bettors and were rewarded after last week's UK£48m market cap gain

Key Insights

• Given the large stake in the stock by institutions, ImmuPharma's stock price might be vulnerable to their trading decisions
• A total of 5 investors have a majority stake in the company with 54% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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Every investor in ImmuPharma plc (LON:IMM) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 80% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained UK£48m in market cap last week. One-year return to shareholders is currently 1,041% and last week’s gain was the icing on the cake.

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

See our latest analysis for ImmuPharma

What Does The Institutional Ownership Tell Us About ImmuPharma?

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 ImmuPharma. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of ImmuPharma, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in ImmuPharma. Looking at our data, we can see that the largest shareholder is Hargreaves Lansdown Asset Management Ltd. with 19% of shares outstanding. With 11% and 10% of the shares outstanding respectively, HBOS Investment Fund Managers Limited and Aberdeen Group Plc are the second and third largest shareholders.

To make our study more interesting, we found that the top 5 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of ImmuPharma

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 data suggests that insiders own under 1% of ImmuPharma plc in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just UK£88m, and the board has only UK£660k worth of shares in their own names. 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 12% 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 7.0%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 instance, we've identified 4 warning signs for ImmuPharma (3 don't sit too well with us) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.