Do Institutions Own InflaRx N.V. (NASDAQ:IFRX) Shares?

By
Simply Wall St
Published
March 01, 2021
NasdaqGS:IFRX
Source: Shutterstock

If you want to know who really controls InflaRx N.V. (NASDAQ:IFRX), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

InflaRx is a smaller company with a market capitalization of US$186m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about InflaRx.

Check out our latest analysis for InflaRx

ownership-breakdown
NasdaqGS:IFRX Ownership Breakdown March 1st 2021

What Does The Institutional Ownership Tell Us About InflaRx?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that InflaRx does have institutional investors; and they hold a good portion of the company's stock. 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 InflaRx's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:IFRX Earnings and Revenue Growth March 1st 2021

We note that hedge funds don't have a meaningful investment in InflaRx. Looking at our data, we can see that the largest shareholder is Staidson (Beijing) BioPharmaceuticals Co., Ltd. with 8.2% of shares outstanding. Renfeng Guo is the second largest shareholder owning 6.2% of common stock, and Niels Riedemann holds about 3.8% of the company stock. Two of the top three shareholders happen to be Top Key Executive and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of InflaRx

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of InflaRx N.V.. It has a market capitalization of just US$186m, and insiders have US$19m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 42% ownership, the general public have some degree of sway over InflaRx. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

It appears to us that public companies own 5.4% of InflaRx. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand InflaRx better, we need to consider many other factors. Be aware that InflaRx is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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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