Hedge funds owners may take dramatic actions as Scancell Holdings plc's (LON:SCLP) recent 22% drop adds to one-year losses

Key Insights

• Institutions' substantial holdings in Scancell Holdings implies that they have significant influence over the company's share price
• A total of 4 investors have a majority stake in the company with 52% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Scancell Holdings plc (LON:SCLP), it is important to understand the ownership structure of the business. We can see that hedge funds own the lion's share in the company with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And hedge funds investors saw their holdings value drop by 22% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 19% for shareholders. Generally speaking, hedge funds are quite aggressively managed, and are usually looking to maximize short-term returns. Because of their large stake in Scancell Holdings, they hold a lot of power, and persistent under performance could lead to them influencing management decisions that might diverge from the company's long-term goals.

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

Check out our latest analysis for Scancell Holdings

What Does The Institutional Ownership Tell Us About Scancell Holdings?

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 Scancell Holdings. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Scancell Holdings' earnings history below. Of course, the future is what really matters.

It would appear that 44% of Scancell Holdings shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is Redmile Group, LLC, with ownership of 29%. Meanwhile, the second and third largest shareholders, hold 14% and 4.2%, of the shares outstanding, respectively.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Scancell Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can see that insiders own shares in Scancell Holdings plc. In their own names, insiders own UK£1.1m worth of stock in the UK£85m 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

The general public, who are usually individual investors, hold a 24% stake in Scancell Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Scancell Holdings (1 doesn't sit too well with us) that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.