Recent uptick might appease Monte Rosa Therapeutics, Inc. (NASDAQ:GLUE) institutional owners after losing 39% over the past year

Key Insights

• Given the large stake in the stock by institutions, Monte Rosa Therapeutics' stock price might be vulnerable to their trading decisions
• 52% of the business is held by the top 5 shareholders
• Insiders have sold recently

A look at the shareholders of Monte Rosa Therapeutics, Inc. (NASDAQ:GLUE) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 40% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

After a year of 39% losses, last week’s 15% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.

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

See our latest analysis for Monte Rosa Therapeutics

What Does The Institutional Ownership Tell Us About Monte Rosa 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.

As you can see, institutional investors have a fair amount of stake in Monte Rosa Therapeutics. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Monte Rosa Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.

It looks like hedge funds own 15% of Monte Rosa Therapeutics shares. 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 Versant Venture Management, LLC with 15% of shares outstanding. New Enterprise Associates, Inc. is the second largest shareholder owning 13% of common stock, and FMR LLC holds about 8.7% of the company stock. Furthermore, CEO Markus Warmuth is the owner of 0.7% of the company's shares.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Monte Rosa Therapeutics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Monte Rosa Therapeutics, Inc. insiders own under 1% of the company. It appears that the board holds about US$1.7m worth of stock. This compares to a market capitalization of US$238m. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Monte Rosa Therapeutics. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 27% stake in Monte Rosa Therapeutics. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Monte Rosa Therapeutics is showing 4 warning signs in our investment analysis , you should know about...

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.

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