Individual investors invested in OKYO Pharma Limited (NASDAQ:OKYO) up 16% last week, insiders too were rewarded

Key Insights

• Significant control over OKYO Pharma by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 9 investors have a majority stake in the company with 41% ownership
• Insider ownership in OKYO Pharma is 33%

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To get a sense of who is truly in control of OKYO Pharma Limited (NASDAQ:OKYO), it is important to understand the ownership structure of the business. With 59% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 16% increase in the stock price last week, individual investors profited the most, but insiders who own 33% stock also stood to gain from the increase.

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

View our latest analysis for OKYO Pharma

What Does The Institutional Ownership Tell Us About OKYO Pharma?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

OKYO Pharma already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see OKYO Pharma's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in OKYO Pharma. The company's largest shareholder is Gabriele Marco Cerrone, with ownership of 27%. For context, the second largest shareholder holds about 7.3% of the shares outstanding, followed by an ownership of 6.1% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 9 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. 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 OKYO Pharma

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in OKYO Pharma Limited. Insiders have a US$34m stake in this US$102m business. 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

The general public, who are usually individual investors, hold a substantial 59% stake in OKYO Pharma, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 5 warning signs we've spotted with OKYO Pharma (including 3 which are significant) .

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.