Institutional investors in Emergent BioSolutions Inc. (NYSE:EBS) lost 9.5% last week but have reaped the benefits of longer-term growth

Key Insights

• Institutions' substantial holdings in Emergent BioSolutions implies that they have significant influence over the company's share price
• 48% of the business is held by the top 25 shareholders
• Recent sales by insiders

If you want to know who really controls Emergent BioSolutions Inc. (NYSE:EBS), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 9.5% last week. Still, the 278% one-year gains may have helped mitigate their overall losses. They should, however, be mindful of further losses in the future.

In the chart below, we zoom in on the different ownership groups of Emergent BioSolutions.

Check out our latest analysis for Emergent BioSolutions

What Does The Institutional Ownership Tell Us About Emergent BioSolutions?

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.

Emergent BioSolutions 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. 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 Emergent BioSolutions' earnings history below. Of course, the future is what really matters.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Emergent BioSolutions is not owned by hedge funds. The Vanguard Group, Inc. is currently the company's largest shareholder with 6.3% of shares outstanding. With 4.6% and 4.1% of the shares outstanding respectively, Marshall Wace LLP and Charles Schwab Investment Management, Inc. are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Emergent BioSolutions

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can report that insiders do own shares in Emergent BioSolutions Inc.. In their own names, insiders own US$9.5m worth of stock in the US$511m 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 39% stake in Emergent BioSolutions. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Emergent BioSolutions better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Emergent BioSolutions you should be aware of.

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.