Could Synthetic Biologics, Inc.'s (NYSEMKT:SYN) Investor Composition Influence The Stock Price?

By
Simply Wall St
Published
May 04, 2020
AMEX:SYN

A look at the shareholders of Synthetic Biologics, Inc. (NYSEMKT:SYN) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

Synthetic Biologics is a smaller company with a market capitalization of US$5.6m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Synthetic Biologics.

Check out our latest analysis for Synthetic Biologics

AMEX:SYN Ownership Summary May 4th 2020
AMEX:SYN Ownership Summary May 4th 2020

What Does The Institutional Ownership Tell Us About Synthetic Biologics?

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.

Synthetic Biologics already has institutions on the share registry. Indeed, they own 9.4% of 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. 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 Synthetic Biologics, (below). Of course, keep in mind that there are other factors to consider, too.

AMEX:SYN Income Statement May 4th 2020
AMEX:SYN Income Statement May 4th 2020

We note that hedge funds don't have a meaningful investment in Synthetic Biologics. Our data shows that Sabby Management, LLC is the largest shareholder with 4.1% of shares outstanding. The second and third largest shareholders are Renaissance Technologies Corp. and UBS Asset Management, holding 3.5% and 0.6%, respectively.

Our studies suggest that the top 25 shareholders collectively control less than 50% of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Synthetic Biologics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data suggests that insiders own under 1% of Synthetic Biologics, Inc. in their own names. It appears that the board holds about US$45k worth of stock. This compares to a market capitalization of US$5.6m. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are mostly retail investors, collectively hold 90% of Synthetic Biologics shares. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Synthetic Biologics better, we need to consider many other factors. For instance, we've identified 5 warning signs for Synthetic Biologics (3 are a bit concerning) that 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.

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.

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. Thank you for reading.

Promoted
When trading Synthetic Biologics or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.