Here's What BeyondSpring Inc.'s (NASDAQ:BYSI) Shareholder Ownership Structure Looks Like

By
Simply Wall St
Published
October 13, 2021
NasdaqCM:BYSI
Source: Shutterstock

The big shareholder groups in BeyondSpring Inc. (NASDAQ:BYSI) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

BeyondSpring is a smaller company with a market capitalization of US$654m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about BeyondSpring.

Check out our latest analysis for BeyondSpring

ownership-breakdown
NasdaqCM:BYSI Ownership Breakdown October 14th 2021

What Does The Institutional Ownership Tell Us About BeyondSpring?

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.

BeyondSpring already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 BeyondSpring's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqCM:BYSI Earnings and Revenue Growth October 14th 2021

Hedge funds don't have many shares in BeyondSpring. The company's CEO Lan Huang is the largest shareholder with 26% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 7.7% of the stock.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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

Insider Ownership Of BeyondSpring

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.

It seems insiders own a significant proportion of BeyondSpring Inc.. Insiders own US$190m worth of shares in the US$654m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, with a 33% 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.

Private Equity Ownership

With an ownership of 18%, 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with BeyondSpring (at least 2 which are a bit concerning) , and understanding them should be part of your investment process.

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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