Painful week for individual investors invested in Aldeyra Therapeutics, Inc. (NASDAQ:ALDX) after 28% drop, institutions also suffered losses

Key Insights

• Aldeyra Therapeutics' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 12 investors have a majority stake in the company with 50% ownership
• Recent sales by insiders

If you want to know who really controls Aldeyra Therapeutics, Inc. (NASDAQ:ALDX), then you'll have to look at the makeup of its share registry. With 37% stake, individual investors 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).

While institutions who own 37% came under pressure after market cap dropped to US$171m last week,individual investors took the most losses.

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

Check out 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.

As you can see, institutional investors have a fair amount of stake in Aldeyra Therapeutics. 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. 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 Aldeyra Therapeutics' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Aldeyra Therapeutics. Perceptive Advisors LLC is currently the company's largest shareholder with 15% of shares outstanding. Knoll Capital Management is the second largest shareholder owning 9.3% of common stock, and The Vanguard Group, Inc. holds about 6.7% of the company stock. Furthermore, CEO Todd Brady is the owner of 1.9% of the company's shares.

After doing some more digging, we found that the top 12 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 Aldeyra Therapeutics

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.

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 report that insiders do own shares in Aldeyra Therapeutics, Inc.. In their own names, insiders own US$4.1m worth of stock in the US$171m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

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 24%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Aldeyra Therapeutics (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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.