Here's What Arrowhead Pharmaceuticals, Inc.'s (NASDAQ:ARWR) Shareholder Ownership Structure Looks Like

A look at the shareholders of Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

Arrowhead Pharmaceuticals is a pretty big company. It has a market capitalization of US$8.4b. Normally institutions would own a significant portion of a company this size. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Arrowhead Pharmaceuticals.

Check out our latest analysis for Arrowhead Pharmaceuticals

What Does The Institutional Ownership Tell Us About Arrowhead Pharmaceuticals?

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 Arrowhead Pharmaceuticals 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. 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 Arrowhead Pharmaceuticals' earnings history below. Of course, the future is what really matters.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Arrowhead Pharmaceuticals. The company's largest shareholder is BlackRock, Inc., with ownership of 12%. For context, the second largest shareholder holds about 8.9% of the shares outstanding, followed by an ownership of 4.4% by the third-largest shareholder. Furthermore, CEO Christopher Anzalone is the owner of 1.6% of the company's shares.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 20 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 Arrowhead Pharmaceuticals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

I can report that insiders do own shares in Arrowhead Pharmaceuticals, Inc.. It is a very large company, and board members collectively own US$258m worth of shares (at current prices). I sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public, with a 30% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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. To that end, you should be aware of the 3 warning signs we've spotted with Arrowhead Pharmaceuticals .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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