private companies who own 41% along with institutions invested in Shield Therapeutics plc (LON:STX) saw increase in their holdings value last week

Key Insights

• Significant control over Shield Therapeutics by private companies implies that the general public has more power to influence management and governance-related decisions
• 53% of the business is held by the top 3 shareholders
• Institutional ownership in Shield Therapeutics is 35%

If you want to know who really controls Shield Therapeutics plc (LON:STX), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that reaped the most benefits after last week’s 17% price gain, institutions also received a 35% cut.

In the chart below, we zoom in on the different ownership groups of Shield Therapeutics.

Check out our latest analysis for Shield Therapeutics

What Does The Institutional Ownership Tell Us About Shield Therapeutics?

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.

As you can see, institutional investors have a fair amount of stake in Shield Therapeutics. 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 Shield Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.

Shield Therapeutics is not owned by hedge funds. Aop Orphan International Ag is currently the largest shareholder, with 40% of shares outstanding. Nestlé S.A. is the second largest shareholder owning 7.9% of common stock, and Jupiter Fund Management Plc holds about 4.8% of the company stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Shield Therapeutics

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Shield Therapeutics plc. In their own names, insiders own UK£2.2m worth of stock in the UK£81m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shield Therapeutics. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 41%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

We can see that public companies hold 7.9% of the Shield Therapeutics shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shield Therapeutics better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shield Therapeutics (of which 2 are concerning!) you should know about.

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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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.