374Water Inc.'s (NASDAQ:SCWO) top holders are insiders and they are likely disappointed by the recent 11% drop

Key Insights

• Insiders appear to have a vested interest in 374Water's growth, as seen by their sizeable ownership
• 50% of the business is held by the top 3 shareholders
• 13% of 374Water is held by Institutions

A look at the shareholders of 374Water Inc. (NASDAQ:SCWO) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 11% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of 374Water.

See our latest analysis for 374Water

What Does The Institutional Ownership Tell Us About 374Water?

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.

374Water already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 374Water, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in 374Water. Our data shows that Yaacov Nagar is the largest shareholder with 28% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 4.6%, of the shares outstanding, respectively. Marc Deshusses, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of 374Water

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.

It seems insiders own a significant proportion of 374Water Inc.. Insiders have a US$63m stake in this US$134m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in 374Water. 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 Company Ownership

It seems that Private Companies own 4.6%, of the 374Water stock. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for 374Water you should be aware of, and 3 of them don't sit too well with us.

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.

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