Contineum Therapeutics, Inc.'s (NASDAQ:CTNM) 12% loss last week hit both individual investors who own 37% as well as institutions

Key Insights

• The considerable ownership by retail investors in Contineum Therapeutics indicates that they collectively have a greater say in management and business strategy
• The top 11 shareholders own 50% of the company
• Institutions own 33% of Contineum Therapeutics

Every investor in Contineum Therapeutics, Inc. (NASDAQ:CTNM) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 37% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of retail investors took a hit after last week’s 12% price drop, institutions with their 33% holdings also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Contineum Therapeutics.

See our latest analysis for Contineum Therapeutics

What Does The Institutional Ownership Tell Us About Contineum 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.

We can see that Contineum 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 Contineum Therapeutics' historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 15% of Contineum Therapeutics shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Baker Bros. Advisors LP is currently the company's largest shareholder with 7.9% of shares outstanding. For context, the second largest shareholder holds about 7.7% of the shares outstanding, followed by an ownership of 6.7% by the third-largest shareholder.

After doing some more digging, we found that the top 11 have the combined ownership of 50% 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 Contineum Therapeutics

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 Contineum Therapeutics, Inc.. As individuals, the insiders collectively own US$4.9m worth of the US$321m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Contineum 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.

Private Equity Ownership

With an ownership of 14%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Contineum Therapeutics better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Contineum Therapeutics .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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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.