What Type Of Shareholders Make Up XBiotech Inc.'s (NASDAQ:XBIT) Share Registry?

By
Simply Wall St
Published
September 27, 2021
NasdaqGS:XBIT
Source: Shutterstock

The big shareholder groups in XBiotech Inc. (NASDAQ:XBIT) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.

XBiotech is not a large company by global standards. It has a market capitalization of US$435m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about XBiotech.

Check out our latest analysis for XBiotech

ownership-breakdown
NasdaqGS:XBIT Ownership Breakdown September 27th 2021

What Does The Institutional Ownership Tell Us About XBiotech?

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.

XBiotech already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 XBiotech's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:XBIT Earnings and Revenue Growth September 27th 2021

Hedge funds don't have many shares in XBiotech. Looking at our data, we can see that the largest shareholder is the CEO John Simard with 14% of shares outstanding. With 13% and 8.6% of the shares outstanding respectively, Thomas Gut and W. McKenzie are the second and third largest shareholders. Interestingly, the third-largest shareholder, W. McKenzie is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 15 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of XBiotech

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of XBiotech Inc.. Insiders own US$157m worth of shares in the US$435m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 46% ownership, the general public have some degree of sway over XBiotech. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - XBiotech has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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