Stock Analysis

While institutions invested in Danimer Scientific, Inc. (NYSE:DNMR) benefited from last week's 54% gain, retail investors stood to gain the most

NYSE:DNMR
Source: Shutterstock

Key Insights

  • Significant control over Danimer Scientific by retail investors implies that the general public has more power to influence management and governance-related decisions
  • 39% of the business is held by the top 25 shareholders
  • Recent purchases by insiders

A look at the shareholders of Danimer Scientific, Inc. (NYSE:DNMR) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 54% price gain, institutions also received a 34% cut.

Let's delve deeper into each type of owner of Danimer Scientific, beginning with the chart below.

Check out our latest analysis for Danimer Scientific

ownership-breakdown
NYSE:DNMR Ownership Breakdown February 16th 2024

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.

We can see that Danimer Scientific does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Danimer Scientific's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NYSE:DNMR Earnings and Revenue Growth February 16th 2024

We note that hedge funds don't have a meaningful investment in Danimer Scientific. Our data shows that BlackRock, Inc. is the largest shareholder with 6.1% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.9% and 4.2%, of the shares outstanding, respectively. Stephen Croskrey, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Danimer Scientific

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 own US$12m worth of shares in the US$102m company. 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, mostly comprising of individual investors, collectively holds 54% of Danimer Scientific shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Danimer Scientific (at least 2 which are potentially serious) , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

New: Manage All Your Stock Portfolios in One Place

We've created the ultimate portfolio companion for stock investors, and it's free.

• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks

Try a Demo Portfolio for Free

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.