Could Corbus Pharmaceuticals Holdings, Inc.’s (NASDAQ:CRBP) Investor Composition Influence The Stock Price?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Every investor in Corbus Pharmaceuticals Holdings, Inc. (NASDAQ:CRBP) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.’

Corbus Pharmaceuticals Holdings is not a large company by global standards. It has a market capitalization of US$484m, which means it wouldn’t have the attention of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about CRBP.

View our latest analysis for Corbus Pharmaceuticals Holdings

NasdaqGM:CRBP Ownership Summary, May 13th 2019
NasdaqGM:CRBP Ownership Summary, May 13th 2019

What Does The Institutional Ownership Tell Us About Corbus Pharmaceuticals Holdings?

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.

Corbus Pharmaceuticals Holdings already has institutions on the share registry. Indeed, they own 39% of 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 Corbus Pharmaceuticals Holdings’s earnings history, below. Of course, the future is what really matters.

NasdaqGM:CRBP Income Statement, May 13th 2019
NasdaqGM:CRBP Income Statement, May 13th 2019

Hedge funds don’t have many shares in Corbus Pharmaceuticals Holdings. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Corbus Pharmaceuticals Holdings

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Corbus Pharmaceuticals Holdings, Inc.. In their own names, insiders own US$26m worth of stock in the US$484m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 48% ownership, the general public have some degree of sway over CRBP. 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 a stake of 7.7%, private equity firms could influence the CRBP board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it 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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.