Recent uptick might appease CytomX Therapeutics, Inc. (NASDAQ:CTMX) institutional owners after losing 21% over the past year

Key Insights

• Given the large stake in the stock by institutions, CytomX Therapeutics' stock price might be vulnerable to their trading decisions
• A total of 12 investors have a majority stake in the company with 52% ownership
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in CytomX Therapeutics, Inc. (NASDAQ:CTMX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would appreciate the 14% increase in share price last week, given their one-year losses have totalled a disappointing 21%.

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

View our latest analysis for CytomX Therapeutics

What Does The Institutional Ownership Tell Us About CytomX Therapeutics?

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.

CytomX Therapeutics 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 CytomX Therapeutics' 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. It would appear that 6.7% of CytomX Therapeutics shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Tang Capital Management, LLC with 10.0% of shares outstanding. With 6.7% and 6.6% of the shares outstanding respectively, BVF Partners L.P. and The Vanguard Group, Inc. are the second and third largest shareholders. Additionally, the company's CEO Sean McCarthy directly holds 0.7% of the total shares outstanding.

After doing some more digging, we found that the top 12 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.

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 CytomX 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 report that insiders do own shares in CytomX Therapeutics, Inc.. It has a market capitalization of just US$101m, and insiders have US$1.0m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over CytomX Therapeutics. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CytomX Therapeutics better, we need to consider many other factors. Take risks for example - CytomX Therapeutics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.