Following a 26% decline over last year, recent gains may please Scancell Holdings plc (LON:SCLP) hedge funds owners

By
Simply Wall St
Published
April 12, 2022
AIM:SCLP
Source: Shutterstock

If you want to know who really controls Scancell Holdings plc (LON:SCLP), then you'll have to look at the makeup of its share registry. We can see that hedge funds own the lion's share in the company with 44% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Hedge funds investors would appreciate the 59% increase in share prices last week, given their one-year returns have been disappointing at 26%.

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

Check out our latest analysis for Scancell Holdings

ownership-breakdown
AIM:SCLP Ownership Breakdown April 12th 2022

What Does The Institutional Ownership Tell Us About Scancell Holdings?

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.

We can see that Scancell Holdings does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Scancell Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
AIM:SCLP Earnings and Revenue Growth April 12th 2022

Our data indicates that hedge funds own 44% of Scancell Holdings. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Redmile Group, LLC with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 5.6% of the stock. Furthermore, CEO Lindy Durrant is the owner of 0.5% of the company's shares.

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 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Scancell Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Scancell Holdings plc. In their own names, insiders own UK£2.2m worth of stock in the UK£138m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Scancell Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 5.6% stake in Scancell Holdings. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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 Scancell Holdings (2 are concerning) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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