Stock Analysis

Could The Shattuck Labs, Inc. (NASDAQ:STTK) Ownership Structure Tell Us Something Useful?

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NasdaqGS:STTK
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If you want to know who really controls Shattuck Labs, Inc. (NASDAQ:STTK), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Shattuck Labs isn't enormous, but it's not particularly small either. It has a market capitalization of US$1.6b, which means it would generally expect to see some institutions on the share registry. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Shattuck Labs.

View our latest analysis for Shattuck Labs

ownership-breakdown
NasdaqGS:STTK Ownership Breakdown March 8th 2021

What Does The Institutional Ownership Tell Us About Shattuck Labs?

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.

As you can see, institutional investors have a fair amount of stake in Shattuck Labs. 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 Shattuck Labs' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NasdaqGS:STTK Earnings and Revenue Growth March 8th 2021

It would appear that 19% of Shattuck Labs shares are controlled by hedge funds. 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. The company's largest shareholder is FMR LLC, with ownership of 15%. Redmile Group, LLC is the second largest shareholder owning 13% of common stock, and Josiah Hornblower holds about 8.2% of the company stock. Josiah Hornblower, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. In addition, we found that Taylor Schreiber, the CEO has 6.5% of the shares allocated to their name.

We also observed that the top 6 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Shattuck Labs

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. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Shattuck Labs, Inc.. It has a market capitalization of just US$1.6b, and insiders have US$332m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public holds a 19% stake in Shattuck Labs. 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

It appears to us that public companies own 5.0% of Shattuck Labs. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Shattuck Labs you should be aware of, and 1 of them can't be ignored.

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.

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