After losing 28% in the past year, Adverum Biotechnologies, Inc. (NASDAQ:ADVM) institutional owners must be relieved by the recent gain

Key Insights

• Significantly high institutional ownership implies Adverum Biotechnologies' stock price is sensitive to their trading actions
• A total of 6 investors have a majority stake in the company with 53% ownership
• Insider ownership in Adverum Biotechnologies is 12%

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A look at the shareholders of Adverum Biotechnologies, Inc. (NASDAQ:ADVM) can tell us which group is most powerful. With 38% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would appreciate the 22% increase in share price last week, given their one-year losses have totalled a disappointing 28%.

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

See our latest analysis for Adverum Biotechnologies

What Does The Institutional Ownership Tell Us About Adverum Biotechnologies?

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

Our data indicates that hedge funds own 15% of Adverum Biotechnologies. 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. BML Capital Management, LLC is currently the company's largest shareholder with 15% of shares outstanding. For context, the second largest shareholder holds about 9.9% of the shares outstanding, followed by an ownership of 9.7% by the third-largest shareholder.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Adverum Biotechnologies

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.

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 most recent data indicates that insiders own a reasonable proportion of Adverum Biotechnologies, Inc.. It has a market capitalization of just US$105m, and insiders have US$13m worth of shares in their own names. 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-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. 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

Private equity firms hold a 18% stake in Adverum Biotechnologies. This suggests they can be influential in key policy decisions. 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 Adverum Biotechnologies better, we need to consider many other factors. For instance, we've identified 5 warning signs for Adverum Biotechnologies (3 are a bit concerning) that you should be aware of.

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. 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.