NewAmsterdam Pharma Company N.V. (NASDAQ:NAMS) surges 13%; private equity firms who own 46% shares profited along with institutions

Key Insights

• NewAmsterdam Pharma's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 5 investors have a majority stake in the company with 55% ownership
• Recent purchases by insiders

To get a sense of who is truly in control of NewAmsterdam Pharma Company N.V. (NASDAQ:NAMS), it is important to understand the ownership structure of the business. With 46% stake, private equity firms possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private equity firms were the group that reaped the most benefits after last week’s 13% price gain, institutions also received a 29% cut.

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

Check out our latest analysis for NewAmsterdam Pharma

What Does The Institutional Ownership Tell Us About NewAmsterdam Pharma?

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 NewAmsterdam Pharma 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 NewAmsterdam Pharma's earnings history below. Of course, the future is what really matters.

It would appear that 8.7% of NewAmsterdam Pharma shares are controlled by hedge funds. 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. The company's largest shareholder is Frazier Life Sciences Management, LP, with ownership of 13%. Forbion Capital Partners B.V. is the second largest shareholder owning 13% of common stock, and Bain Capital Life Sciences Investors, LLC holds about 11% of the company stock. Additionally, the company's CEO Michael Davidson directly holds 0.9% of the total shares outstanding.

Our research also brought to light the fact that roughly 55% 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 NewAmsterdam Pharma

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in NewAmsterdam Pharma Company N.V.. This is a big company, so it is good to see this level of alignment. Insiders own US$27m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With an ownership of 46%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand NewAmsterdam Pharma better, we need to consider many other factors. For instance, we've identified 2 warning signs for NewAmsterdam Pharma that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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

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.