- United States
After losing 26% in the past year, ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) institutional owners must be relieved by the recent gain
- Significantly high institutional ownership implies ORIC Pharmaceuticals' stock price is sensitive to their trading actions
- 53% of the business is held by the top 8 shareholders
- Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
Every investor in ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Last week's US$33m market cap gain would probably be appreciated by institutional investors, especially after a year of 26% losses.
Let's delve deeper into each type of owner of ORIC Pharmaceuticals, beginning with the chart below.
See our latest analysis for ORIC Pharmaceuticals
What Does The Institutional Ownership Tell Us About ORIC Pharmaceuticals?
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.
ORIC Pharmaceuticals 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 ORIC Pharmaceuticals' historic earnings and revenue below, but keep in mind there's always more to the story.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It looks like hedge funds own 7.6% of ORIC Pharmaceuticals 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 Pfizer Inc. is the largest shareholder with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.9% and 7.9% of the stock. Additionally, the company's CEO Jacob Chacko directly holds 1.8% of the total shares outstanding.
We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 ORIC Pharmaceuticals
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
We can see that insiders own shares in ORIC Pharmaceuticals, Inc.. As individuals, the insiders collectively own US$6.5m worth of the US$224m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
With an ownership of 7.9%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Public Company Ownership
It appears to us that public companies own 12% of ORIC Pharmaceuticals. 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.
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 - ORIC Pharmaceuticals has 5 warning signs (and 3 which make us uncomfortable) we think you should know about.
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.
ORIC Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, discovers and develops therapies for treatment of cancers in the United States.
Flawless balance sheet and slightly overvalued.