Scancell Holdings plc's (LON:SCLP) latest 10.0% decline adds to one-year losses, hedge funds investors may consider drastic measures

Key Insights

• Given the large stake in the stock by institutions, Scancell Holdings' stock price might be vulnerable to their trading decisions
• The top 4 shareholders own 52% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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. With 44% stake, hedge funds possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, hedge funds investors endured the highest losses last week after market cap fell by UK£11m. The recent loss, which adds to a one-year loss of 28% for stockholders, may not sit well with this group of investors. Hedge funds are often aggressively managed, usually with the goal of focusing on short-term profits. 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?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Scancell Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Scancell Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 44% of Scancell Holdings. 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%. Vulpes Investment Management Private Limited is the second largest shareholder owning 14% of common stock, and Calculus Capital Limited holds about 4.2% of the company stock.

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. 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

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data suggests that insiders own under 1% of Scancell Holdings plc in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than UK£231k worth of shares in the UK£101m company. 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, who are usually individual investors, hold a 22% 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for Scancell Holdings you should be aware of, and 2 of them are a bit unpleasant.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.