Poseida Therapeutics, Inc.'s (NASDAQ:PSTX) high institutional ownership speaks for itself as stock continues to impress, up 17% over last week

Key Insights

• Given the large stake in the stock by institutions, Poseida Therapeutics' stock price might be vulnerable to their trading decisions
• 53% of the business is held by the top 6 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of Poseida Therapeutics, Inc. (NASDAQ:PSTX) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% 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.

And things are looking up for institutional investors after the company gained US$43m in market cap last week. One-year return to shareholders is currently 75% and last week’s gain was the icing on the cake.

In the chart below, we zoom in on the different ownership groups of Poseida Therapeutics.

View our latest analysis for Poseida Therapeutics

What Does The Institutional Ownership Tell Us About Poseida 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.

Poseida Therapeutics 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. 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 Poseida Therapeutics' earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 6.2% of Poseida Therapeutics. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is FMR LLC, with ownership of 15%. Meanwhile, the second and third largest shareholders, hold 12% and 8.6%, of the shares outstanding, respectively.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Poseida Therapeutics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Poseida Therapeutics, Inc.. It has a market capitalization of just US$292m, and insiders have US$20m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Poseida Therapeutics. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 21% of the Poseida Therapeutics shares on issue. 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 Poseida Therapeutics better, we need to consider many other factors. For instance, we've identified 4 warning signs for Poseida Therapeutics (1 doesn't sit too well with us) 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.

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