If you want to know who really controls AFT Pharmaceuticals Limited (NZSE:AFT), then you’ll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.
AFT Pharmaceuticals is not a large company by global standards. It has a market capitalization of NZ$534m, which means it wouldn’t have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don’t own many shares in the company. Let’s take a closer look to see what the different types of shareholders can tell us about AFT Pharmaceuticals.
What Does The Institutional Ownership Tell Us About AFT Pharmaceuticals?
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.
Institutions have a very small stake in AFT Pharmaceuticals. That indicates that the company is on the radar of some funds, but it isn’t particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it’s the future that counts most.
AFT Pharmaceuticals is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Hartley Atkinson with 70% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. For context, the second largest shareholder holds about 2.8% of the shares outstanding, followed by an ownership of 0.8% by the third-largest shareholder.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of AFT Pharmaceuticals
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Our most recent data indicates that insiders own the majority of AFT Pharmaceuticals Limited. This means they can collectively make decisions for the company. That means they own NZ$379m worth of shares in the NZ$534m company. That’s quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public holds a 25% stake in AFT Pharmaceuticals. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
It’s always worth thinking about the different groups who own shares in a company. But to understand AFT Pharmaceuticals better, we need to consider many other factors. For example, we’ve discovered 3 warning signs for AFT Pharmaceuticals (1 is concerning!) that you should be aware of before investing here.
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. 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.
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