With 46% ownership in XOMA Royalty Corporation (NASDAQ:XOMA), institutional investors have a lot riding on the business

Explore XOMA Royalty's Fair Values from the Community and select yours

Key Insights

• Significantly high institutional ownership implies XOMA Royalty's stock price is sensitive to their trading actions
• 53% of the business is held by the top 5 shareholders
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

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If you want to know who really controls XOMA Royalty Corporation (NASDAQ:XOMA), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week’s 17% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 18% and last week’s gain was the icing on the cake.

Let's take a closer look to see what the different types of shareholders can tell us about XOMA Royalty.

View our latest analysis for XOMA Royalty

What Does The Institutional Ownership Tell Us About XOMA Royalty?

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.

XOMA Royalty already has institutions on the share registry. Indeed, they own a respectable stake in 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. 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 XOMA Royalty's historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 22% of XOMA Royalty shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's largest shareholder is BVF Partners L.P., with ownership of 22%. Meanwhile, the second and third largest shareholders, hold 13% and 9.0%, of the shares outstanding, respectively. Furthermore, CEO Owen Hughes is the owner of 0.5% of the company's shares.

On looking further, we found that 53% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of XOMA Royalty

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.

Our most recent data indicates that insiders own some shares in XOMA Royalty Corporation. In their own names, insiders own US$4.0m worth of stock in the US$341m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in XOMA Royalty. 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.

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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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.