Could UroGen Pharma Ltd.’s (NASDAQ:URGN) Investor Composition Influence The Stock Price?

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If you want to know who really controls UroGen Pharma Ltd. (NASDAQ:URGN), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

UroGen Pharma is a smaller company with a market capitalization of US$746m, 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 URGN.

Check out our latest analysis for UroGen Pharma

NasdaqGM:URGN Ownership Summary, June 6th 2019
NasdaqGM:URGN Ownership Summary, June 6th 2019

What Does The Institutional Ownership Tell Us About UroGen Pharma?

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 own 60% of UroGen Pharma. 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 UroGen Pharma’s earnings history, below. Of course, the future is what really matters.

NasdaqGM:URGN Income Statement, June 6th 2019
NasdaqGM:URGN Income Statement, June 6th 2019

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It looks like hedge funds own 8.5% of UroGen Pharma 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of UroGen Pharma

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.

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.

I can report that insiders do own shares in UroGen Pharma Ltd.. In their own names, insiders own US$60m worth of stock in the US$746m 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

With a 16% ownership, the general public have some degree of sway over URGN. 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 6.8%, 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:

It’s always worth thinking about the different groups who own shares in a company. But to understand UroGen Pharma better, we need to consider many other factors.

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 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.