Stock Analysis

While institutions invested in Alpine Immune Sciences, Inc. (NASDAQ:ALPN) benefited from last week's 15% gain, private equity firms stood to gain the most

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Key Insights

  • Significant control over Alpine Immune Sciences by private equity firms implies that the general public has more power to influence management and governance-related decisions
  • A total of 7 investors have a majority stake in the company with 50% ownership
  • Institutions own 30% of Alpine Immune Sciences

To get a sense of who is truly in control of Alpine Immune Sciences, Inc. (NASDAQ:ALPN), it is important to understand the ownership structure of the business. With 39% stake, private equity firms 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.

Private equity firms gained the most after market cap touched US$382m last week, while institutions who own 30% also benefitted.

In the chart below, we zoom in on the different ownership groups of Alpine Immune Sciences.

Check out our latest analysis for Alpine Immune Sciences

NasdaqGM:ALPN Ownership Breakdown March 17th 2023

What Does The Institutional Ownership Tell Us About Alpine Immune Sciences?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Alpine Immune Sciences does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Alpine Immune Sciences' historic earnings and revenue below, but keep in mind there's always more to the story.

NasdaqGM:ALPN Earnings and Revenue Growth March 17th 2023

It looks like hedge funds own 12% of Alpine Immune Sciences shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. RA Capital Management, L.P. is currently the company's largest shareholder with 9.6% of shares outstanding. With 8.9% and 7.9% of the shares outstanding respectively, OrbiMed Advisors LLC and Great Point Partners, LLC are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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

Insider Ownership Of Alpine Immune Sciences

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

Shareholders would probably be interested to learn that insiders own shares in Alpine Immune Sciences, Inc.. As individuals, the insiders collectively own US$3.9m worth of the US$382m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Alpine Immune Sciences. 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

Private equity firms hold a 39% stake in Alpine Immune Sciences. This suggests they can be influential in key policy decisions. 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. Take risks for example - Alpine Immune Sciences has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about.

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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