Karolinska Development AB (publ)'s (STO:KDEV) largest shareholders are public companies who were rewarded as market cap surged kr132m last week

By
Simply Wall St
Published
January 08, 2022
OM:KDEV
Source: Shutterstock

To get a sense of who is truly in control of Karolinska Development AB (publ) (STO:KDEV), it is important to understand the ownership structure of the business. With 43% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies collectively scored the highest last week as the company hit kr1.1b market cap following a 14% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Karolinska Development.

Check out our latest analysis for Karolinska Development

ownership-breakdown
OM:KDEV Ownership Breakdown January 8th 2022

What Does The Institutional Ownership Tell Us About Karolinska Development?

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.

Karolinska Development 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. 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 Karolinska Development, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
OM:KDEV Earnings and Revenue Growth January 8th 2022

We note that hedge funds don't have a meaningful investment in Karolinska Development. Sino Biopharmaceutical Limited is currently the company's largest shareholder with 43% of shares outstanding. Worldwide International Investments Limited is the second largest shareholder owning 16% of common stock, and Karolinska Institutet Holding Ab holds about 3.2% of the company stock.

To make our study more interesting, we found that the top 2 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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Karolinska Development

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 less than 1% of Karolinska Development AB (publ). But they may have an indirect interest through a corporate structure that we haven't picked up on. It appears that the board holds about kr2.1m worth of stock. This compares to a market capitalization of kr1.1b. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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 22%, 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

Public companies currently own 43% of Karolinska Development stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Take risks for example - Karolinska Development has 4 warning signs (and 3 which are a bit concerning) we think you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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