If you want to know who really controls Jounce Therapeutics, Inc. (NASDAQ:JNCE), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
Jounce Therapeutics is a smaller company with a market capitalization of US$263m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about Jounce Therapeutics.
View 2 warning signs we detected for Jounce Therapeutics
What Does The Institutional Ownership Tell Us About Jounce Therapeutics?
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 Jounce Therapeutics does have institutional investors; and they hold 31% of the 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 Jounce Therapeutics's earnings history, below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Jounce Therapeutics. Third Rock Ventures, LLC is currently the largest shareholder, with 40% of shares outstanding. Bristol-Myers Squibb Company is the second largest shareholder with 10% of common stock, followed by Wellington Management Group LLP, holding 4.2% of the stock.
Additionally, we found that 2 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Jounce Therapeutics
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. 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.
Our most recent data indicates that insiders own some shares in Jounce Therapeutics, Inc.. In their own names, insiders own US$2.9m worth of stock in the US$263m company. There's no doubt that we learn useful information from looking at a company's ownership structure and shareholders. However, there are many other factors to consider, such as the risks within the company itself. For example, we've discovered 2 warning signs for Jounce Therapeutics (of which 1 is major) which any shareholder or potential investor should be aware of.
General Public Ownership
The general public, with a 17% stake in the company, will not easily be ignored. 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.
Private Equity Ownership
With a stake of 40%, private equity firms could influence the JNCE 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 10%, of the JNCE shares on issue. We can't be certain, but this is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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