Institutional owners may take dramatic actions as Harvard Bioscience, Inc.'s (NASDAQ:HBIO) recent 12% drop adds to one-year losses

Key Insights

• Institutions' substantial holdings in Harvard Bioscience implies that they have significant influence over the company's share price
• 52% of the business is held by the top 11 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Harvard Bioscience, Inc. (NASDAQ:HBIO) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 70% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And institutional investors saw their holdings value drop by 12% last week. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 45% might not go down well especially with this category of shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell Harvard Bioscience which might hurt individual investors.

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

Check out our latest analysis for Harvard Bioscience

What Does The Institutional Ownership Tell Us About Harvard Bioscience?

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 Harvard Bioscience 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. 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 Harvard Bioscience's earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. It looks like hedge funds own 5.0% of Harvard Bioscience shares. 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. Our data shows that BlackRock, Inc. is the largest shareholder with 6.5% of shares outstanding. With 6.4% and 5.9% of the shares outstanding respectively, Punch & Associates Investment Management, Inc. and Harvey Partners, LLC are the second and third largest shareholders. Furthermore, CEO James Green is the owner of 4.4% of the company's shares.

After doing some more digging, we found that the top 11 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Harvard Bioscience

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Harvard Bioscience, Inc.. In their own names, insiders own US$7.9m worth of stock in the US$107m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in Harvard Bioscience. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Harvard Bioscience has 2 warning signs we think you should be aware of.

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.

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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.