What You Need To Know About Marrone Bio Innovations, Inc.'s (NASDAQ:MBII) Investor Composition

By
Simply Wall St
Published
October 26, 2020

A look at the shareholders of Marrone Bio Innovations, Inc. (NASDAQ:MBII) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.

Marrone Bio Innovations is a smaller company with a market capitalization of US$188m, 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. Let's delve deeper into each type of owner, to discover more about Marrone Bio Innovations.

See our latest analysis for Marrone Bio Innovations

NasdaqCM:MBII Ownership Breakdown October 26th 2020

What Does The Institutional Ownership Tell Us About Marrone Bio Innovations?

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.

As you can see, institutional investors have a fair amount of stake in Marrone Bio Innovations. 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 Marrone Bio Innovations, (below). Of course, keep in mind that there are other factors to consider, too.

NasdaqCM:MBII Earnings and Revenue Growth October 26th 2020

It looks like hedge funds own 9.4% of Marrone Bio Innovations shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Ospraie Ag Science LLC is currently the largest shareholder, with 35% of shares outstanding. Ivy Investment Management Company is the second largest shareholder owning 16% of common stock, and Ardsley Advisory Partners holds about 9.4% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 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 Marrone Bio Innovations

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data suggests that insiders own under 1% of Marrone Bio Innovations, Inc. in their own names. It seems the board members have no more than US$1.7m worth of shares in the US$188m company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 26% ownership, the general public have some degree of sway over Marrone Bio Innovations. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 35%, private equity firms could influence the Marrone Bio Innovations 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.

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. Be aware that Marrone Bio Innovations is showing 2 warning signs in our investment analysis , 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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This article by Simply Wall St is general in nature. 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.
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