Here's What Milestone Scientific Inc.'s (NYSEMKT:MLSS) Shareholder Ownership Structure Looks Like

The big shareholder groups in Milestone Scientific Inc. (NYSEMKT:MLSS) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Milestone Scientific is a smaller company with a market capitalization of US$129m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Milestone Scientific.

View our latest analysis for Milestone Scientific

What Does The Institutional Ownership Tell Us About Milestone Scientific?

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.

Milestone Scientific 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. 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 Milestone Scientific's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Milestone Scientific. Innovest SpA is currently the largest shareholder, with 16% of shares outstanding. K. Andersen is the second largest shareholder owning 5.8% of common stock, and The Vanguard Group, Inc. holds about 4.1% of the company stock. In addition, we found that Leonard Osser, the CEO has 3.9% of the shares allocated to his name

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Milestone Scientific

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.

It seems insiders own a significant proportion of Milestone Scientific Inc.. Insiders have a US$18m stake in this US$129m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- mostly retail investors -- own 59% of Milestone Scientific. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Equity Ownership

With a stake of 16%, private equity firms could influence the Milestone Scientific board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Milestone Scientific better, we need to consider many other factors. To that end, you should be aware of the 4 warning signs we've spotted with Milestone Scientific .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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