Could SCYNEXIS, Inc.’s (NASDAQ:SCYX) Investor Composition Influence The Stock Price?

If you want to know who really controls SCYNEXIS, Inc. (NASDAQ:SCYX), then you’ll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. We also tend to see lower insider ownership in companies that were previously publicly owned.

SCYNEXIS is a smaller company with a market capitalization of US$29m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about SCYX.

See our latest analysis for SCYNEXIS

NasdaqGM:SCYX Ownership Summary January 7th 19
NasdaqGM:SCYX Ownership Summary January 7th 19

What Does The Institutional Ownership Tell Us About SCYNEXIS?

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.

SCYNEXIS already has institutions on the share registry. Indeed, they own 32% of the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of SCYNEXIS, (below). Of course, keep in mind that there are other factors to consider, too.

NasdaqGM:SCYX Income Statement Export January 7th 19
NasdaqGM:SCYX Income Statement Export January 7th 19

It looks like hedge funds own 15% of SCYNEXIS shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of SCYNEXIS

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.

I can report that insiders do own shares in SCYNEXIS, Inc.. As individuals, the insiders collectively own US$454k worth of the US$29m company. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 48% ownership, the general public have some degree of sway over SCYX. 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.

Public Company Ownership

Public companies currently own 3.2% of SCYX stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.