Individual investors who hold 37% of Aldeyra Therapeutics, Inc. (NASDAQ:ALDX) gained 14%, institutions profited as well

Key Insights

• Aldeyra Therapeutics' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 13 investors have a majority stake in the company with 50% ownership
• Insiders have sold recently

Every investor in Aldeyra Therapeutics, Inc. (NASDAQ:ALDX) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 14% increase in the stock price last week, individual investors profited the most, but institutions who own 36% stock also stood to gain from the increase.

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

See our latest analysis for Aldeyra Therapeutics

What Does The Institutional Ownership Tell Us About Aldeyra Therapeutics?

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 Aldeyra Therapeutics 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Aldeyra Therapeutics' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Aldeyra Therapeutics. Looking at our data, we can see that the largest shareholder is Perceptive Advisors LLC with 16% of shares outstanding. With 9.2% and 6.3% of the shares outstanding respectively, Knoll Capital Management and The Vanguard Group, Inc. are the second and third largest shareholders. In addition, we found that Todd Brady, the CEO has 1.9% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Aldeyra Therapeutics

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Aldeyra Therapeutics, Inc.. It has a market capitalization of just US$320m, and insiders have US$8.3m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Aldeyra Therapeutics. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With an ownership of 25%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Aldeyra Therapeutics (of which 1 is significant!) you should know about.

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.