Danimer Scientific, Inc.'s (NYSE:DNMR) recent 15% pullback adds to one-year year losses, institutional owners may take drastic measures

By
Simply Wall St
Published
February 23, 2022
NYSE:DNMR
Source: Shutterstock

A look at the shareholders of Danimer Scientific, Inc. (NYSE:DNMR) can tell us which group is most powerful. With 54% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$346m last week after a 15% drop in the share price. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 92% might not go down well especially with this category of shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell Danimer Scientific, which might have negative implications on individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Danimer Scientific.

View our latest analysis for Danimer Scientific

ownership-breakdown
NYSE:DNMR Ownership Breakdown February 23rd 2022

What Does The Institutional Ownership Tell Us About Danimer Scientific?

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.

Danimer Scientific 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. 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 Danimer Scientific, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:DNMR Earnings and Revenue Growth February 23rd 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Danimer Scientific. The Vanguard Group, Inc. is currently the company's largest shareholder with 8.0% of shares outstanding. For context, the second largest shareholder holds about 6.4% of the shares outstanding, followed by an ownership of 5.5% by the third-largest shareholder. Furthermore, CEO Stephen Croskrey is the owner of 5.4% of the company's shares.

After doing some more digging, we found that the top 21 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 Danimer Scientific

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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 information suggests that insiders maintain a significant holding in Danimer Scientific, Inc.. Insiders have a US$50m stake in this US$346m 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

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Danimer Scientific. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Danimer Scientific better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Danimer 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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