Retail investors among ADC Therapeutics SA's (NYSE:ADCT) largest shareholders, saw gain in holdings value after stock jumped 14% last week

Key Insights

• ADC Therapeutics' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 11 shareholders own 50% of the company
• Insiders have sold recently

If you want to know who really controls ADC Therapeutics SA (NYSE:ADCT), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 41% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors were the biggest beneficiaries of last week’s 14% gain.

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

View our latest analysis for ADC Therapeutics

What Does The Institutional Ownership Tell Us About ADC 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.

ADC Therapeutics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of ADC Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.

It would appear that 23% of ADC Therapeutics shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Redmile Group, LLC is currently the largest shareholder, with 16% of shares outstanding. For context, the second largest shareholder holds about 7.7% of the shares outstanding, followed by an ownership of 6.7% by the third-largest shareholder. In addition, we found that Ameet Mallik, the CEO has 1.2% of the shares allocated to their name.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 ADC Therapeutics

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 ADC Therapeutics SA. In their own names, insiders own US$14m worth of stock in the US$294m 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

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 10%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

It appears to us that public companies own 4.2% of ADC Therapeutics. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand ADC Therapeutics better, we need to consider many other factors. Be aware that ADC Therapeutics is showing 5 warning signs in our investment analysis , and 1 of those is a bit concerning...

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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com