Stock Analysis

Swedish Orphan Biovitrum AB (publ) (STO:SOBI) is a favorite amongst institutional investors who own 38%

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Key Insights

  • Institutions' substantial holdings in Swedish Orphan Biovitrum implies that they have significant influence over the company's share price
  • The top 5 shareholders own 53% of the company
  • Insiders have bought recently

To get a sense of who is truly in control of Swedish Orphan Biovitrum AB (publ) (STO:SOBI), it is important to understand the ownership structure of the business. With 38% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Swedish Orphan Biovitrum.

Check out our latest analysis for Swedish Orphan Biovitrum

OM:SOBI Ownership Breakdown September 23rd 2023

What Does The Institutional Ownership Tell Us About Swedish Orphan Biovitrum?

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.

Swedish Orphan Biovitrum already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Swedish Orphan Biovitrum's historic earnings and revenue below, but keep in mind there's always more to the story.

OM:SOBI Earnings and Revenue Growth September 23rd 2023

Swedish Orphan Biovitrum is not owned by hedge funds. Investor AB (publ) is currently the largest shareholder, with 30% of shares outstanding. AstraZeneca PLC is the second largest shareholder owning 8.7% of common stock, and Fourth Swedish National Pension Fund (AP4) holds about 5.7% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Swedish Orphan Biovitrum

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.

Our information suggests that Swedish Orphan Biovitrum AB (publ) insiders own under 1% of the company. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around kr153m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 30%, private equity firms could influence the Swedish Orphan Biovitrum board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

We can see that public companies hold 8.7% of the Swedish Orphan Biovitrum shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Swedish Orphan Biovitrum (of which 1 is a bit unpleasant!) you should know about.

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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Swedish Orphan Biovitrum

Swedish Orphan Biovitrum AB (publ), an integrated biotechnology company, researches, develops, manufactures, and sells pharmaceuticals in the therapeutic areas of haematology, immunology, and specialty care in Europe, North America, the Middle East, Asia, and Australia.

Very undervalued with reasonable growth potential.