GRAIL, Inc. (NASDAQ:GRAL) institutional investors have had a good week as stock gains 49%

Key Insights

• Institutions' substantial holdings in GRAIL implies that they have significant influence over the company's share price
• 51% of the business is held by the top 8 shareholders
• Insiders have sold recently

A look at the shareholders of GRAIL, Inc. (NASDAQ:GRAL) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, institutional investors scored the highest last week as the company hit US$961m market cap following a 49% gain in the stock.

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

See our latest analysis for GRAIL

What Does The Institutional Ownership Tell Us About GRAIL?

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 GRAIL does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 GRAIL's earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 8.9% of GRAIL. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Illumina, Inc. with 13% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 8.9%, of the shares outstanding, respectively.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 GRAIL

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our information suggests that GRAIL, Inc. insiders own under 1% of the company. It seems the board members have no more than US$6.9m worth of shares in the US$961m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GRAIL. 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

With a stake of 11%, private equity firms could influence the GRAIL board. 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.

Public Company Ownership

We can see that public companies hold 13% of the GRAIL shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GRAIL better, we need to consider many other factors. Be aware that GRAIL is showing 3 warning signs in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.