Aquestive Therapeutics, Inc.'s (NASDAQ:AQST) high institutional ownership speaks for itself as stock continues to impress, up 15% over last week

Key Insights

• Given the large stake in the stock by institutions, Aquestive Therapeutics' stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 20 shareholders
• Insiders have sold recently

A look at the shareholders of Aquestive Therapeutics, Inc. (NASDAQ:AQST) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, institutional investors ended up benefitting the most after the company hit US$309m in market cap. One-year return to shareholders is currently 28% and last week’s gain was the icing on the cake.

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

Check out our latest analysis for Aquestive Therapeutics

What Does The Institutional Ownership Tell Us About Aquestive Therapeutics?

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.

We can see that Aquestive Therapeutics does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Aquestive Therapeutics' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Aquestive Therapeutics. Looking at our data, we can see that the largest shareholder is Bratton Capital Management, L.P. with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.6% and 6.1% of the stock. Additionally, the company's CEO Daniel Barber directly holds 1.5% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 20 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 Aquestive Therapeutics

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. 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.

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 Aquestive Therapeutics, Inc.. It has a market capitalization of just US$309m, and insiders have US$16m 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

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Aquestive Therapeutics. 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

With an ownership of 6.1%, 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. Case in point: We've spotted 3 warning signs for Aquestive Therapeutics you should be aware of, and 2 of them are significant.

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.

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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.