While institutions invested in Achieve Life Sciences, Inc. (NASDAQ:ACHV) benefited from last week's 11% gain, individual investors stood to gain the most

Key Insights

• Significant control over Achieve Life Sciences by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 41% of the company
• 41% of Achieve Life Sciences is held by Institutions

Every investor in Achieve Life Sciences, Inc. (NASDAQ:ACHV) should be aware of the most powerful shareholder groups. With 58% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s US$12m market cap gain, institutions too had a 41% share in those profits.

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

View our latest analysis for Achieve Life Sciences

What Does The Institutional Ownership Tell Us About Achieve Life Sciences?

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.

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

Hedge funds don't have many shares in Achieve Life Sciences. Our data shows that B. Riley Capital Management, LLC is the largest shareholder with 17% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.8% and 3.5%, of the shares outstanding, respectively.

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 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 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 Achieve Life Sciences

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. 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.

We can see that insiders own shares in Achieve Life Sciences, Inc.. It has a market capitalization of just US$124m, and insiders have US$1.3m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of Achieve Life Sciences shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

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

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.

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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.