Stock Analysis

Silence Therapeutics plc's (NASDAQ:SLN) latest 14% decline adds to one-year losses, institutional investors may consider drastic measures

NasdaqGM:SLN
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Key Insights

  • Significantly high institutional ownership implies Silence Therapeutics' stock price is sensitive to their trading actions
  • 51% of the business is held by the top 8 shareholders
  • Insiders own 26% of Silence Therapeutics

Every investor in Silence Therapeutics plc (NASDAQ:SLN) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And institutional investors saw their holdings value drop by 14% last week. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 64% might not go down well especially with this category of shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the decline continues, institutional investors may be pressured to sell Silence Therapeutics which might hurt individual investors.

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

See our latest analysis for Silence Therapeutics

ownership-breakdown
NasdaqGM:SLN Ownership Breakdown January 10th 2025

What Does The Institutional Ownership Tell Us About Silence Therapeutics?

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 Silence Therapeutics does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Silence Therapeutics' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGM:SLN Earnings and Revenue Growth January 10th 2025

It looks like hedge funds own 5.6% of Silence Therapeutics shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Richard Griffiths with 15% of shares outstanding. Robert Keith is the second largest shareholder owning 8.7% of common stock, and TCG Crossover Management, LLC holds about 6.4% of the company stock.

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.

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

Insider Ownership Of Silence Therapeutics

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Silence Therapeutics plc. Insiders have a US$79m stake in this US$299m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Silence Therapeutics. 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 12%, 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:

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. Take risks for example - Silence Therapeutics has 3 warning signs we think you should be aware of.

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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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.

About NasdaqGM:SLN

Silence Therapeutics

A biotechnology company, focuses on the discovery and development novel molecules incorporating short interfering ribonucleic acid (siRNA) to inhibit the expression of specific target genes in hematology, cardiovascular, and rare diseases.

Flawless balance sheet low.