Swedish Orphan Biovitrum AB (publ) (STO:SOBI) is largely controlled by institutional shareholders who own 40% of the company

Key Insights

• Institutions' substantial holdings in Swedish Orphan Biovitrum implies that they have significant influence over the company's share price
• 51% of the business is held by the top 4 shareholders
• Insiders have sold recently

A look at the shareholders of Swedish Orphan Biovitrum AB (publ) (STO:SOBI) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 40% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

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

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

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.

Swedish Orphan Biovitrum 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. 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.

We note that hedge funds don't have a meaningful investment in Swedish Orphan Biovitrum. The company's largest shareholder is Investor AB (publ), with ownership of 32%. With 9.0% and 5.6% of the shares outstanding respectively, AstraZeneca PLC and Fourth Swedish National Pension Fund (AP4) are the second and third largest shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Swedish Orphan Biovitrum

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Swedish Orphan Biovitrum AB (publ) insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own kr186m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 18% 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

Private equity firms hold a 32% stake in Swedish Orphan Biovitrum. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Public Company Ownership

It appears to us that public companies own 9.0% of Swedish Orphan Biovitrum. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Swedish Orphan Biovitrum better, we need to consider many other factors. For instance, we've identified 3 warning signs for Swedish Orphan Biovitrum that you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.