Following a 23% decline over last year, recent gains may please Indivior PLC (LON:INDV) institutional owners

Key Insights

• Significantly high institutional ownership implies Indivior's stock price is sensitive to their trading actions
• 50% of the business is held by the top 10 shareholders
• Insiders have bought recently

A look at the shareholders of Indivior PLC (LON:INDV) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week's UK£68m market cap gain would probably be appreciated by institutional investors, especially after a year of 23% losses.

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

View our latest analysis for Indivior

What Does The Institutional Ownership Tell Us About Indivior?

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.

Indivior already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Indivior's earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. It would appear that 16% of Indivior shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's largest shareholder is Two Seas Capital LP, with ownership of 9.6%. Brookfield Corporation is the second largest shareholder owning 7.6% of common stock, and Deerfield Management Company, L.P. Series C holds about 5.9% of the company stock.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Indivior

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 Indivior PLC. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around UK£44m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in Indivior. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Indivior better, we need to consider many other factors. For example, we've discovered 2 warning signs for Indivior (1 is a bit concerning!) that you should be aware of before investing here.

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.